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TIM talks with KKR

March 14, 2022

Telecom Italia (TIM) is starting formal talks with the KKR fund on its €10.8 billion offer.

KKR made an initial approach for TIM in November 2021. TIM has now said that it would start talks with KKR while simultaneously exploring its alternative of possible merger with state-backed broadband operator Open Fiber.

TIM carries €29 billion of debt. Newly appointed CEO Pietro Labriola is charged with reviving the company and is backed by TIM’s largest shareholder Vivendi. He has proposed separating network assets from TIM’s services arm.

KKR plans de-listing TIM and remodelling it by carving out its network infrastructure assets.

A sale to KKR is the most straightforward option for TIM, but its association with state lender CDP – which owns 60 per cent of Open Fiber – makes a merger with the operator a possibility. TIM has resisted merger with Open Fiber because it would have to relinquish of a majority of its fixed landline assets, but Labriola has said that it is ready to give this up in order to make a deal.

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