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The sale is the first time a former phone monopoly in a major European country is divesting its landline grid
Telecom Italia (TIM) has finalised the sale of its fixed line network ‘NetCo’ to KKR, in a deal worth up to €22 billion.
The sale saw TIM transfer its fixed network infrastructure and wholesale activities to its subsidiary FiberCop, which was then fully bought out by KKR, who already owned a minority stake in the business.
The deal was first announced in November last year and received the go-ahead from the European Commission at the end of May, with the Commission having concluded that the transaction “would not significantly reduce the level of competition” in the European market.
The expected deleverage upon completion of the deal is €14.2 billion, which is expected reduce TIM’s net financial debt by €13.8 billion.
“The completion of the transaction with KKR and the Italian Ministry of Finance is the result of two and a half years of intense work, during which we have improved the management of TIM and identified industrial and financial solutions that will enable us to meet future challenges”, said Pietro Labriola, CEO of TIM.
“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. 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 continued.
As is common during acquisitions of this scale, significant job losses are expected. According to the company statement, TIM’s employee count is set to be reduced from 37,065 to 17,281 people. The time scale for these job cuts have yet to be announced.
TIM confirmed that more details on the deal will be provided during the Q2 2024 results conference call on 1st August.
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