By Jonathan Easton
Telecom Italia (TIM) has agreed a deal with Italian state investor CDP to combine its fixed network assets with Open Fiber.
The tie-up aims to create an ultra-fast broadband network across Italy, a country that has historically been plagued by coverage issues in mountainous and rural areas.
The preliminary agreement between TIM and CDP also has the signatures of infrastructure fund Macquarie, which owns a minority stake in Open Fiber, and KKR which holds a stake on TIM’s last-mile network unit.
CDP, already TIM’s second-largest investor, will control the combined business, with a binding deal set to be negotiated by October. Following this, the deal will go to national and EU antitrust authorities, while TIM shareholders will also vote on the deal.
TIM, currently weighed down by heavy debts, turned down a €10.8 billion(US$11.63billion) proposal from KKR to take full control of the company and delist it. The operator is still looking to sell off its landline network, which has been valued at €15-20 billion.
The final structure of the deal with Open Fiber could also include an outright sale of TIM’s fixed network, to create a business which would take up a significant amount of its debts.
