A new chapter begins for TIM. Telecom Italia (TIM) today completed the sale of its fixed network infrastructure and wholesale activities to the US investment fund KKR.
- TIM’s fibre and copper fixed network covers 89% of Italian households and spans 23 million kilometres, making it a critical part of Italy’s telecommunications infrastructure.
- TIM has confirmed the subsequent acquisition of the entire capital of FiberCop by Optics BidCo, a subsidiary of KKR.
- The sale of NetCo, valued at up to €22.0 billion, including earn-outs linked to the fulfilment of certain conditions, allows TIM to reduce its net financial debt in line with its previous disclosure to the market.
- The expected deleverage upon completion, pending customary post-closing adjustments, is confirmed at €14.2 billion.
Who is involved? Italian infrastructure fund F2i will have a 10% stake in the new company, while Abu Dhabi’s sovereign wealth fund ADIA and the Canada Pension Plan will have a 20% and 17.5% stake respectively.
- In May, the European Commission gave its unconditional approval to the deal, stating that “the transaction does not raise any competition concerns in the European Economic Area”.
Historically…TIM has been closely intertwined with politics and various governments due to its strategic importance, falling under the Golden Power regime. This regulatory instrument allows the government to block or impose specific conditions on financial transactions affecting national interests.
- Therefore, the current government ensured the separation of commercial activities while maintaining control over the network and cable infrastructure.
- The separation of the network and services marks a significant turning point in telecom networks. It will allow TIM to concentrate on the future’s most critical technological challenges, including cloud services, cybersecurity, IoT and artificial intelligence.
- “As the first European mover, we chose to separate the fixed network infrastructure services from the other services we provide, to ensure the best, sustainable and fastest possible development of TIM,” stated Pietro Labriola, CEO of TIM. “TIM will remain the reference Telco in Italy and will continue to be the country’s most infrastructure-rich operator, offering innovative services, across both fixed and mobile services, serving families, the Public Administration and businesses,” he added.
What is next? Negotiations for the sale of Sparkle, TIM’s submarine cable unit, could accelerate in the coming weeks.
- Discussions have been ongoing for several months with the Italian Ministry of Economy and Finance and the Spanish private equity fund Asterion, which already controls Retelit in Italy.
- A new offer could be presented at the next TIM board meeting on 31 July.
