Hong Kong billionaire Li Ka-shing’s Hutchison Whampoa Ltd agreed to buy Orange Austria in a deal valued at 1.3 billion euros ($1.7 billion), adding to more than $31 billion of investments in overseas mobile-phone operations.

Hutchison 3G Austria, the local unit of Hutchison, expects to complete the Orange Austria purchase in the middle of this year, the Hong Kong parent said in a statement on Friday.

As a second leg of the deal, Hutchison will sell some of Orange Austria’s assets to Telekom Austria for 390 million euros, Telekom said separately. The assets comprise frequencies, base station sites, mobile phone operator YESSS! Telekommunikation GmbH and certain intellectual property rights, the statement added.

Orange Austria is 65 percent-owned by Mid Europa Partners, with the rest held by France Telecom SA.

Hutchison’s net consideration is 900 million euros ($1.18 billion), giving the business an enterprise value to EBITDA multiple of 6.9 times. Bank of America/Merrill Lynch said that the multiple paid by Hutchison “is at the high end of comparable private transaction multiples, but below the 7.6 previously speculated.”

Hutchison 3G Austria already operates under the ‘3’ brand, competing against Deutsche Telekom AG’s T-Mobile and A1.

The deal would make it Austria’s third-biggest mobile phone operator, with 2.8 million customers and a 22 percent market share. The two units had combined revenues of more than 700 million euros in 2011, Hutchison said.

“Overall, we do think the deal offers one of the few relatively visible paths to long-term sustained profitability for 3 Austria,” Bank of America/Merrill Lynch said in a report.

Hutchison Austria expects to generate cost and capital spending synergies of at least 500 million euros from the combination, according to the statement.

Hutchison shares rose to the highest level in five months in Hong Kong trading on optimism the purchase may improve its ability to compete against market leaders Telekom Austria and Deutsche Telekom AG’s T-Mobile Austria.

“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.

“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, Hong Kong’s richest man, is stepping up acquisitions in Europe as companies in the region seek capital to counter the sovereign debt crisis.

“With the situation in Europe as it is, there will be opportunities to cherry-pick,” said Adrian Lowe, who rates Hutchison shares “buy” at Mirae Asset Securities in Hong Kong. The proposed acquisition of Orange Austria is “positive” for Hutchison’s mobile operations in Austria, he said.

Hutchison also owns 3G wireless network operations in Britain, Italy and Australia, among other countries. It competes with Britain’s biggest mobile operator, Everything Everywhere — a joint venture of Orange and T-Mobile — Telefonica SA’s O2 and Vodafone Group Plc.

The wireless business, which had been losing money over the past decade, broke even in the second half of 2010 and recovered further last year. Hutchison said it was expected to contribute to the conglomerate’s profits in the second half of 2011.

J.P. Morgan advised Hutchison group on the purchase, while Morgan Stanley advised the sellers, a source, not authorised to speak to the media but familiar with the process, said.