Hong Kong-based Hutchison Whampoa is confident the European Commission (EC) review of its proposed takeover of Orange Austria can be completed within three weeks and intends to seek a judicial review if it is not approved.
Hutchison managing director…
Hong Kong-based Hutchison Whampoa is confident the European Commission (EC) review of its proposed takeover of Orange Austria can be completed within three weeks and intends to seek a judicial review if it is not approved.
Hutchison managing director Canning Fok told reporters in Vienna that he was “at a loss” as to why the EC decided to launch an in-depth, phase-two investigation of the proposed €1.3bn (US$1.6bn) deal, which would see Orange Austria and its own local operation merged, media reported.
The EC said in late June that it opened the 90-working-day investigation as it was concerned the proposed deal may create significant competition problems by removing Orange as a competitor in the retail market for end consumers and in the wholesale market for network access and call origination.
However, Fok was quoted in Vienna as saying the creation of the new merged company, which would be Austria’s third largest mobile operator behind Telekom Austria and Deutsche Telekom’s T-Mobile, would benefit the market as it would have more funds to invest in services and a faster, 4G network.
But independent competition lawyers had previously pointed out that the EC might also be concerned about mergers of smaller players if the regulator considers one of the players, for instance Hutchison’s Three, to be a maverick, and if a merger could change its disruptive role in the market in the future.
Fok said Hutchison has signed a deal with an unidentified telco allowing it to use the network of the merged company on an MVNO basis and that it is willing to talk to other aspiring new market entrants.
Hutchison chief executive officer Jan Trionow stressed that the merger is also dependent upon the Austrian competition commission, BWB, approving the sale of Orange Austria’s discount brand Yesss! to Telekom Austria for €390m.
The transactions are conditional on each other’s completion, he said, while Fok noted Orange Austria would have too much debt if the Yesss! sale were blocked.
Fok also took the opportunity to say Hutchison will continue to explore acquisition options in Europe, saying it intends to be a buyer, not a seller, in market consolidation deals.
