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The Italian government are said to be focusing investment on critical national infrastructure
The Italian Ministry of Economy and Finance (MEF) and Retelit, a subsidiary of the Spanish Asterion Infrastructure Fund, has made €700 offer for Sparkle, Telecom Italia’s subsea cable unit, the company has announced this week
Negotiations are ongoing, and TIM is expected to carefully evaluate the offer in the context of its overall strategy. The involvement of MEF and Retelit in the bid indicates a potential national interest in securing Sparkle’s infrastructure, which plays a significant role in Italy’s connectivity to global markets.
Further updates are anticipated as discussions progress. The offer is on the table until October 15, and will shortly be submitted to TIM’s board of directors. If accepted, the deal could significantly reduce TIM’s debt burden and provide the company with the financial flexibility to invest in its core operations and future growth.
In a press release Telecom Italia (TIM) said the proposal “will be submitted for examination by TIM’s Board of Directors upon completion of preliminary activities preparatory to the evaluation of the offer.”
The bid from Italy’s Treasury and Asterion reflects a growing interest in critical infrastructure assets. The Italian government has been keen on maintaining control over strategic assets, and this bid aligns with its broader strategy of safeguarding national interests.
It also comes as part of TIM’s ongoing efforts to reduce its debt and streamline its business by selling off non-core assets. TIM has been considering the sale of Sparkle for some time, as part of its broader plan to raise capital and improve its financial position, with debt standing at around €21 billion in the second quarter of 2024.
Earlier this year TIM finalised the sale of its domestic fixed line network (NetCo) to US fund KKR after a lengthy back and forth process. The Italian government gave the greenlight for the sale, worth €22 billion, following an agreement with KKR that will see the government take a stake of up to 20% in the business once the transaction is complete.
“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 TIM chief executive Pietro Labriola, in a statement.
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