Telecom Italia Board Accepts KKR’s $20 Billion Offer for Network Assets
Telecom Italia said the sale would help it reduce debt by about €14 billion, with the deal expected to close by summer 2024
The board of Telecom Italia TIT 0.39%increase; green up pointing triangle SpA has approved the sale of its fixed-line network to KKR KKR 4.04%increase; green up pointing triangle & Co. for more than $20 billion, part of a plan by the former monopoly to reduce increasingly unmanageable amounts of debt.
The Italian telecommunications company said late Sunday that it had voted 11-3 to accept the binding offer by the U.S. private equity group for Telecom Italia’s fixed-line and other assets.
The deal is valued at 18.8 billion euros ($20.18 billion) including debt, and could reach up to €22 billion in the event certain regulatory changes and sector incentives are introduced, the company said in a press release.
Telecom Italia said the sale would help it reduce debt by about €14 billion, with the deal expected to close by summer 2024. Italy’s top phone company has a debt burden of more than €25 billion.
France-based Vivendi SE, a 24% shareholder of Telecom Italia, criticized the board’s decision to accept the deal without a shareholders’ vote. It said in a press release that it would use “any legal means at its disposal” to challenge the decision.
The Telecom Italia board also called KKR’s nonbinding offer for Sparkle, the Italian company’s submarine cable business, unsatisfactory. It said it would give KKR a deadline of Dec. 5 to make a binding offer at a higher valuation.