EU expresses wholesale concerns over KKR–Telecom Italia deal 


Regulators fear that that deal could diminish competition in the wholesale market 

The European Union’s antitrust regulators have begun asking rivals and customers if the acquisition of Telecom Italia (TIM)’s fixed-line network by US investment firm KKR would negatively affect wholesale competition in Italy, according to a Reuters report, citing people familiar with the matter.  

Rivals have reportedly been sent a 49-page document with 79 questions, which they have until the end of the month to respond to. 

Probing from the EU has been prompted by KKR having sought approval from the European Commission earlier this month. The Commission has since confirmed that it would return with a decision on the transaction by the end of May, after seeking input from the wider industry.  

If serious competition concerns are raised by the initial probe, the body could open a four-month in-depth investigation. 

The acquisition, which was confirmed back in November, is worth €18.8 billion and covers all of TIM’s fixed fibre and copper network assets.  

The purpose of the sale is to allow TIM to reduce its debt pile of over €26 billion by €14 billion, giving TIM the financial flexibility it needs to compete in the market effectively.  

If the deal is ultimately receives regulatory approval, it would make Italy the first major European country to divest its landline grid. 

However, TIM’s largest stakeholder, French media giant Vivendi, has made no secret of its disapproval of the deal. Currently undertaking legal action to dispute the deal, it believes that TIM’s assets are worth around €30 billion and are therefore being undervalued.  

In related news, this week TIM also carried out its shareholder meeting, in which CEO Pietro Labriola defeated attempts to unseat him and secured another three years at the helm of the company.  

Minority investors Merlyn Partners and Bluebell Capital Partners had separately sought to challenge Labriola’s reappointment.  

After the meeting, Labriola commended the “sense of responsibility of shareholders who directly or indirectly ensured continuity”. 

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