Telecom Italia Spa delays network deal | The Financial Express

Telecom Italia Spa delays network deal

Earlier this year, Telecom Italia and Cassa Depositi signed a memorandum of understanding aimed at starting the merger, but in October the companies said they needed more time to finalize the offer.

Telecom Italia Spa delays network deal
The plan would see the merger of Telecom Italia’s grid with that of Open Fiber SpA, one its smaller competitors, to create a single national landline network.

Telecom Italia Spa will grant an extra month for Italy’s state lender to present a multibillion-euro offer for its phone carrier, the latest delay to a deal month in the making. 

The company’s board set a Nov. 30 deadline to receive an offer and dropped the exclusivity granted to Cassa Depositi e Prestiti SpA, which is controlled by Italy’s government, according to a statement on Saturday. 

The plan would see the merger of Telecom Italia’s grid with that of Open Fiber SpA, one of its smaller competitors, to create a single national landline network. 

Earlier this year, Telecom Italia and Cassa Depositi signed a memorandum of understanding aimed at starting the merger, but in October the companies said they needed more time to finalize the offer. 

The accord was also signed by Open Fiber and Teemco, a Luxembourg company controlled by US private equity firm KKR & Co., which in turn owns a stake in Telecom Italia’s FiberCop SpA fibre unit, and Macquarie Group Ltd., a minority investor in Open Fiber.

The network’s value remains a sticking point. Telecom Italia’s advisers initially assessed it at about 20 billion euros ($19.4 billion), people familiar with the matter said earlier this year.

The delay, reported by Bloomberg News on Oct. 27, also reflects the impact of Italy’s change in government. Giorgia Meloni this month took over from Mario Draghi as prime minister and is likely to want to weigh in on a deal with major implications for state-owned and strategic critical infrastructure.

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First published on: 30-10-2022 at 14:30 IST