Italian broadband operators Tiscali and Aria are to merge as part of a deal that could come into effect by the end of 2015.
The transaction will allow Tiscali to strength its industrial and financial position, consolidate its presence in the consumer and business segments in the field of broadband access from landlines and mobile phones and create a single operator able to offer ultra broadband access services (with speeds of up to 50 Mbps) all over Italy thanks to the combination of the two network infrastructures. In addition, Tiscali will be able to provide high capacity mobile data services in the future.Tiscali will be able to leverage on Aria’s technology neutral 40 MHz spectrum licence on the 3.5 GHz frequency enabling it to provide LTE ultra broadband services.
Following the transaction, the existing shareholders of Aria will hold a total stake of about 18 per cent of the combined Tiscali, and another about 22 per cent will be held by investment fund ODEF, for a total of newly issued shares equal to 40.81 per cent of the combined entity.
The total value of the operation is estimated at about €77 million; net of the new cash this is equal to a value of €34.5 million for the entire share capital of Aria. The transaction will allow the reimbursement of Tiscali’s debt for about €42 million and is expected to produce synergies and savings of over €10 million per year.
The new Tiscali shall market the products of both groups using the Tiscali brand and will have a customer base of over 700,000 in Italy.
Renato Soru will retain the office of Executive Chairman, while Aria’s Riccardo Ruggiero will take the position of CEO.