U.S. investment firm KKR has received unconditional EU antitrust approval for its acquisition of Telecom Italia’s (TIM) fixed-line network, valued at up to 22 billion euros ($24 billion).
“The Commission investigated the impact of the transaction on the market for wholesale broadband access services in Italy and concluded that it would not significantly reduce the level of competition,” the EU executive, which also acts as the EU antitrust watchdog, stated.
To address concerns from Telecom Italia’s rivals regarding existing contracts established after the creation of FiberCop, TIM’s last-mile grid unit, KKR has pledged to maintain these contracts on the same terms and prices. This informal remedy has also mitigated EU worries, Reuters news report said.
The Commission clarified that the master services agreement (MSA) governing the relationship between NetCo (the grid acquired by KKR) and TIM post-transaction is not integral to the transaction, as it does not grant KKR control over NetCo.
The sale of the network is part of a government-backed strategy to reduce TIM’s significant financial burden. With the EU’s approval, the deal is expected to be finalized soon, according to Italy’s Economy Minister Giancarlo Giorgetti.
TIM previously reported that its domestic revenue, constituting the majority of its sales, declined by 1.3 percent to 2.8 billion euros, while its net financial debt increased to 26.6 billion euros from 25.7 billion euros at the end of the last year.
TIM’s landline network covers nearly 89 percent of Italian households, with its fibre and copper cables extending over 23 million kilometers (14.3 million miles). The sale of the grid is aimed at alleviating the company’s debt burden.
