Hutchison, a conglomerate controlled by tycoon Li Ka-shing, will merge Orange Austria with its Hutchison 3G Austria GmbH unit, and sell on some assets, leaving it with an operation with about a 22% market share and combined revenue of about €700 million.

Hutchison said it will recoup €390 million of its initial outlay by selling frequencies, base stations and mobile phone operator Yesss! Telekommunikation Gmbh to Telekom Austria Group.

Hutshison said 3G Austria is therefore paying a net €900 million for Orange Austria. That's equivalent to an enterprise value of 6.9 times estimated 2011 Ebitda, it noted.

"3 Austria believes it will be able to generate cost and capex synergies with a net present value of at least €500 million from the combination," Hutchison added.

Orange Austria is 65% owned by Mid Europa Partners, a central Europe-focused buyout shop that bought its stake in 2007 in a joint deal alongside France Télécom SA, which owns 35% of the business. That deal valued the operation, then known as One GmbH, at €1.4 billion.

Under the terms of the sale announced Friday, Hutchison may make a further €70 million performance-related payment to Mid Europa. That payment will fall due two years after completion of the deal and is linked to the successful integration and performance of Orange Austria.

Separately, France Télécom said that it would make about €70 million in cash proceeds from the sale of its 35% stake.

France Télécom CEO Stéphane Richard said last year that he would sell his group's Austrian, Swiss and Portuguese operations as he switched attention to faster growing African markets. In December France Télécom struck a $2 billion deal to sell its Orange Switzerland operations to Apax Partners LLP. That deal valued the Swiss assets at about 6.5 times Ebitda for 2011.

Li Ka-shing has been a regular investor in European utilities and infrastructure assets in recent years. In August his Cheung Kong Infrastructure Holdings Ltd. investment vehicle agreed to pay £4.71 billion ($7.46 billion) for the U.K.'s Northumbrian Water Group plc, while a year earlier he snapped up Electricité de France SA's U.K. power network for £5.8 billion.

France Télécom and Mid Europa Partners tapped Morgan Stanley to manage the sale. Hutchison was advised by J.P. Morgan Chase & Co.

Hutchison's shares closed Friday on the Hong Kong exchange at HK$76.40 ($9.85), up HK$2.45, or 3% on their previous close. France Télécom shares traded marginally lower.