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Saturday, 30 June 2012

Telekom Austria's Yesss buy in next phase review,


* Next-stage review could take up to five months

* European Commision also has concerns - watchdog

* Hutchison-Orange deal depends on Yesss divestment

VIENNA, June 28 (Reuters) - Telekom Austria's planned acquisition of budget mobile operator Yesss from Orange faces an extended review by Austria's competition authorities, delaying Hutchison 3G's agreed $1.6 billion takeover of Orange Austria.

The BWB competition watchdog said on Thursday it feared the combination of Telekom Austria and Yesss would have negative consequences for the Austrian market and above all for consumers, who would likely face higher prices.

It said it regretted that the parties involved had been unable to agree concessions after four months, and said the next-phase review by the Austrian cartel office could take at least five months.

"The disappearance of Yesss's aggressive price policy would remove the only competitor to Telekom Austria's current 'bob' brand. BWB fears price increases as a result, since competition in the prepay segment would end," BWB said in a statement.

The disposal of Yesss by Orange, the main brand of France Telecom, is a condition of Hutchison 3G's agreed deal to buy Orange Austria - which is being probed in parallel by the European Commission.

"Here the Commission also has numerous concerns," BWB said.

Hutchison 3G's deal to buy Orange Austria follows a cluster of outbound mergers and acquisitions from Asia as firms with large cash piles and low debt buy assets in Europe, where economies are struggling with a deep debt crisis.

France Telecom is carrying out an portfolio review aimed at exiting low-growth mature markets. It recently agreed to sell Orange Switzerland to private equity group Apax Partners.

BWB said Telekom Austria and Yesss together would have more than 39 percent of the voice-calls market and more than 53 percent of the market for consumer broadband plus mobile deals.

Hutchison shares closed down 1.7 percent in Hong Kong before the news, while Telekom Austria firmed 0.2 percent in Vienna and France Telecom slipped 0.3 percent in Paris by 0913 GMT. ($1 = 0.8028 euros) (Reporting by Georgina Prodhan; Editing by Michael Shields)


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