June 29, 2012 / 7:36 AM / in 5 years

EU steps up probe into Hutch's Orange Austria bid

BRUSSELS/VIENNA (Reuters) - EU regulators are to step up their probe into a bid by Hong Kong’s Hutchison 3G to buy France Telecom’s FTE.PA Orange Austria on concerns that the 1.3 billion euros ($1.62 billion) deal would shrink the number of players in Austria to three.

Hutchison, a unit of Hutchison Whampoa 0013.HK, which is controlled by Hong Kong billionaire Li Ka-shing, unveiled the takeover plan in February.

The combined Hutchison 3G Austria, which operates under the ‘3’ brand in Austria, and Orange Austria would have a 22 percent market share, behind No. 1 player Telekom Austria’s (TELA.VI) A1 and Deutsche Telekom AG’s (DTEGn.DE) T-Mobile.

The European Commission, which has been examining the proposed acquisition since May, opened an in-depth investigation on Friday and will make its decision by November 6.

“The merger will reduce the number of network operators from four to three in Austria. Therefore, the Commission must make sure that this concentration does not lead to higher prices for end consumers,” EU Competition Commissioner Joaquin Almunia said.

Hutchison 3G Austria said it would continue to work closely with the regulator and was confident that the deal would be cleared. [ID:nWEA5510]. France Telecom declined to comment.

The Commission said it will take up to 90 days to make a final decision on the deal.

Opposition from the Commission scuppered Vodafone’s plan (VOD.L) to merge its Greek unit with rival Wind Hellas in February, a source had told Reuters. The merger would have trimmed the number of players from three to two in Greece.

The EU enforcer has never commented on the matter.

The sector has been under pressure recently from tough competition, dampened consumer spending and the need to boost investments in high-speed broadband networks.

($1=0.8047 euros)

Additional reporting by Foo Yun Chee and Gwenaelle Barziz in Paris; Editing by Rex Merrifield and Mike Nesbit

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