The European Commission has cleared the €1.3bn takeover of Orange Austria by Hutchison, but the decision is subject to a number of conditions.
According to the EC Hutchison has agreed to divest radio spectrum and additional rights to an interested new…
The European Commission has cleared the €1.3bn takeover of Orange Austria by Hutchison, but the decision is subject to a number of conditions.
According to the EC Hutchison has agreed to divest radio spectrum and additional rights to an interested new entrant in the Austrian mobile telephony market. This new operator will have the right to acquire spectrum not only from Hutchison but also additional spectrum at an auction planned in 2013 by the Austrian telecom regulator, the EC said.
Hutchison will also offer wholesale access to its network for up to 30% of its capacity to up to 16 MVNOs in the coming 10 years.
The EC said in a statement that “in light of these commitments, the Commission concluded that the transaction would no longer raise competition concerns. This decision is conditional upon full compliance with the commitments”.
The decision has far-reaching implications. Since its notification in early May dealmakers in Europe have closely followed the merger control procedure as it unfolded and its deadline was pushed back several times. However, today’s clearance decision signals that in-country consolidation among operators that reduces the number of competitors from four to only three players is possible – provided the merging parties are prepared to offer far reaching remedies.
Yesss! appeal would “undermine the entire transaction,” Hutchison warns
As part of the transaction, Hutchison plans to sell Orange Austria subsidiary Yesss! to Telekom Austria immediately after the acquisition of Orange Austria. In a separate statement, Hutchison noted that this sale was unconditionally approved by the Austrian Cartel Court in late November.
Commenting on recent suggestions that the Austrian antitrust regulator, BWB, might appeal the clearance decision, Hutchison Austria CEO Jan Trionow warned that the disposal of the MVNO was an integral part of the proposed merger. “An appeal of the Yesss! sale would therefore undermine the entire transaction,” he said in an emailed statement.
