Sources say KKR has exclusively agreed to unconditional EU approval for the deal with Telecom Italia

Authors: Foo Yun Chee and Elvira Pollina

BRUSSELS/MILAN (Reuters): U.S. investment firm KKR is expected to win unconditional approval from the EU antitrust authority to buy Telecom Italia’s (TIM) fixed-line network after agreeing to honor commercial agreements with TIM’s rivals, people with direct knowledge of the matter said.

The 22 billion euro ($23.9 billion) deal is significant because it marks the first time a major telecommunications operator in a major European country has divested its fixed-line network, potentially paving the way for others to follow suit.

According to Friday’s update on the European Commission’s website, KKR did not propose countermeasures on Thursday, which is not the deadline.

The commission, which set a May 30 deadline for an initial assessment of the deal, said its website was up to date on Thursday. KKR declined to comment.

KKR and rivals Telecom Italia have been in negotiations for some time to keep existing contracts signed after the creation of FiberCop, Telecom Italia’s last-mile network unit, on the same terms and prices, the people said.

An agreement on the issue would address EU concerns without KKR having to offer remedies, they said, adding that the companies were still in talks to finalize the deal.

TIM’s fixed-line network covers almost 89% of households in the country, and fiber optic and copper cables stretch over 23 million km (14.3 million miles). The company is selling the network as part of a government-backed debt reduction plan.

($1 = 0.9239 euros)

(Reporting by Foo Yun Chee in Brussels and Elvira Pollina in Rome; Editing by David Evans and Emelia Sithole-Matarise)