By Ben Otto
The board of Telecom Italia SpA has approved the sale of its fixed-line network to KKR & Co. for more than $20 billion, part of a plan by the former monopoly to reduce increasingly unmanageable amounts of debt.
The Italian telecommunications company said late Sunday that it had voted 11-3 to accept the binding offer by the U.S. private equity group for Telecom Italia’s fixed-line and other assets.
The deal is valued at 18.8 billion euros ($20.18 billion) including debt, and could reach up to EUR22 billion in the event certain regulatory changes and sector incentives are introduced, the company said in a press release.
Telecom Italia said the sale would help it reduce debt by about EUR14 billion, with the deal expected to close by summer 2024. Italy’s top phone company has a debt burden of more than EUR25 billion.
France-based Vivendi SE, a 24% shareholder of Telecom Italia, criticized the board’s decision to accept the deal without a shareholders’ vote. It said in a press release that it would use “any legal means at its disposal” to challenge the decision.
The Telecom Italia board also called KKR’s non-binding offer for Sparkle, the Italian company’s submarine cable business, unsatisfactory. It said it would give KKR a deadline of Dec. 5 to make a binding offer at a higher valuation.
Write to Ben Otto at [email protected]
Corrections & Amplifications
This article was corrected at 0506 GMT to reflect the proper company name of France-based Vivendi SE. The original article incorrectly misstated the name as Vivendi SA.
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