The long-anticipated buy-out of Orange Austria by local rival 3 Austria could be finalised this week, according to local press reports.

The Die Presse newspaper reported over the weekend that Orange Austria’s owners – France Telecom (35 percent) and private-equity firm Mid Europa Partners (65 percent) – have agreed a EUR1.4 billion sale to 3 Austria parent Hutchison.

However, Hutchison is then expected to sell Orange assets valued at around EUR300 million-400 million to incumbent player Telekom Austria in a bid to ease possible regulatory concerns over the merger. It has previously been reported that these assets could include base stations, spectrum and Orange’s prepaid ‘Yesss’ brand.

The merger between third-placed operator Orange (2.2 million connections in Q3) and fourth-placed 3 (1.3 million) would create a stronger challenger to Austria’s two largest mobile operators, Telekom Austria’s A1 (5.2 million) and T-Mobile (3.9 million).

According to the latest Wireless Intelligence data, Austria had 12.7 million connections in total in Q3 2011, giving the country a mobile penetration rate of almost 150 percent.

Austria is one of several European markets where France Telecom is reviewing the possible disposal of assets seen as ‘non-core.’ The firm recently sold its Swiss mobile unit to private-equity group Apax Partners for EUR1.6 billion.