Business | Telecoms
Hutchison to buy Orange Austria as Asia firms shop in Europe
Hong Kong billionaire Li expanding global corporate footprint
- Reuters
- Published: 00:00 February 4, 2012
Hong Kong: Hong Kong's Hutchison 3G will buy Orange Austria from France Telecom and a private equity fund in a deal valued at €1.3 billion (Dh6.2 billion) including debt, expanding the corporate footprint in Europe of one of Asia's richest men.
The deal by the unit of Hutchison Whampoa follows a cluster of outbound M&A transactions from Asia in early 2012 as firms with strong cash piles and low debt buy assets in Europe, where economies are struggling with the debt crisis. Hutchison yesterday said it would buy 100 per cent of Orange Austria, confirming an earlier Reuters story. Hutchison shares rose as much as 3.8 per cent to HK$76.20 on the news, bucking a flat overall market.
Hutchison, controlled by Hong Kong billionaire Li Ka Shing, has been shopping for regulated infrastructure and utility assets in developed countries, especially Britain, which is open to foreign ownership of its infrastructure assets.
"It is definitely a positive for the future development as the acquisition cost can be lower in the current economic climate," said Conita Hung, head of equity research at Delta Asia Financial Group.
Good opportunity
"It is a good opportunity for those financially strong companies to buy assets in Europe, especially if they believe in the strong growth prospect," she said.
Li's business empire bought British utility Northumbrian Water Group for £2.41 billion (Dh14 billion) last year, having paid £5.8 billion to buy the British electricity distribution network of France EDF in 2010.
Li, a high-school dropout nicknamed "Superman" by Hong Kong media for his deal-making savvy, started out with a plastic flower business and now has a global empire with 26,000 employees in 55 countries.
Asian firms close $9.3b deals in 2012
So far in 2012, Asian corporates have launched about $9.3 billion worth of outbound deals, compared with $181 billion worth transactions attempted the whole of last year, according to Thomson Reuters data.
High-profile deals this year include Shandong Heavy Industry Group's purchase of a 75 per cent stake in debt-laden Italian yacht-maker Ferretti Group and China Investment Corp's purchase of an 8.7 per cent stake in the holding company of Thames Water, the privately held UK utility.
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