In a strategic move aimed at reducing its mounting debt, Telecom Italia SpA has given its approval for the sale of its fixed-line network to KKR & Co. The binding offer by the U.S. private equity group has been accepted by a majority vote of 11-3.
- The deal, including debt, is valued at 18.8 billion euros ($20.18 billion). However, it has the potential to reach up to EUR22 billion if certain regulatory changes and sector incentives come into play.
- By reducing debt by approximately EUR14 billion, Telecom Italia aims to alleviate its current burden of over EUR25 billion.
- The expected timeline for the deal's closure is by summer 2024.
Vivendi Criticizes Decision
Vivendi SA, a 24% shareholder of Telecom Italia, expressed dissatisfaction with the board's decision to accept the deal without a shareholders' vote. It published a press release stating its intention to utilize all legal avenues available to challenge the decision.
Non-Binding Offer for Sparkle
The board of Telecom Italia also noted its dissatisfaction with KKR's non-binding offer for Sparkle, the company's submarine cable business. To address this concern, Telecom Italia has provided KKR with a deadline of December 5 to submit a binding offer at a higher valuation.