KKR obtains approval from the EU antitrust authority to acquire Telecom Italia’s fixed-line network for USD 24 billion

In a landmark decision, US investment firm KKR on Thursday received unconditional approval from the EU antitrust authority to acquire Telecom Italia’s fixed-line network worth up to 22 billion euros ($24 billion). This transaction is the first time that a former telephone monopoly in a large European country has sold its fixed-line telephony network.

The European Commission, in its capacity as the EU’s antitrust regulator, conducted a thorough investigation into the potential impact of the transaction on the wholesale broadband market in Italy. “The Commission examined the impact of the transaction on the wholesale broadband market in Italy and concluded that it would not significantly reduce the level of competition,” the Commission said.

Read more: The EU will decide on the buyout of KKR Telecom Italia by May 30

Following this announcement, shares of Telecom Italia (TIM) rebounded, closing Thursday’s session 1.5% higher, paring earlier losses. KKR actively responded to the concerns of Telecom Italia’s competitors regarding existing contracts concluded after the creation of FiberCop, Telecom Italia’s last mile network unit. This was reported by sources familiar with the matter Reuters that KKR has committed to maintaining these contracts on the same terms and prices, which will alleviate EU concerns.

Furthermore, the Commission noted that the Master Services Agreement (MSA), which is intended to govern the relationship between NetCo (the network acquired by KKR) and TIM after the transaction, is not a key part of the agreement because it does not give KKR control over NetCo.

The sale of the network is part of a government-backed strategy to reduce TIM’s significant financial burden. With EU approval, the transaction is expected to be finalized soon, as confirmed by Italian Economy Minister Giancarlo Giorgetti in a statement.

Source: Reuters