Telecom Italia, Espresso to merge DTT networks
Telecom Italia Media and Espresso Group have signed agreements to merge their respective DTT network operator businesses controlled by Telecom Italia Media Broadcasting (TIMB) and Rete A.
The merger between TIMB and Rete A, who own three and two digital multiplexes respectively, will create the leading independent network operator in Italy with five digital multiplexes. The operation will lead to significant industrial synergies, as the new group will be able to rely on an annual turnover of approximately €100 million, a positive income result and healthy cash generation.
The merger will be carried out through Espresso Group’s contribution of 100 per cent of Rete A shares to TIMB. On completion of the transfer, TIMedia and Espresso Group will each hold 70 per cent and 30 per cent of shares in TIMB which will control Rete A’s entire capital. Espresso Group will continue to own the equity investment in All Music.
TIMedia will be entitled to appoint the majority of Directors of TIMB, including the CEO, whilst Espresso Group will appoint the company’s Chairman. The agreement signed also states that, once the merger is completed, a valorisation (price establishment) process will be started entailing the search for investors interested in the combined entity.
In light of the uncertainty surrounding legislative developments on frequency use, TIMedia has also reserved the option to purchase the right to use (thus excluding the infrastructure and the customers) one of the five frequencies controlled by the combined entity.
The transaction is expected to be finalised by June, subject to obtaining authorisation from Italy’s Communications Authority.