The antitrust regulators of the European Union are starting to pose some serious questions about the wholesomeness of competition in Italy’s telecom sector, amidst the acquisition of Telecom Italia (TIM)’s fixed-line network by a U.S. investment firm, KKR. This news comes from sources who have chosen to remain anonymous.
The EU regulators have reportedly provided TIM’s rivals with a document stretching to 49 pages, and encompassing 79 questions. These industry competitors have until the end of the month to provide their responses, thus shedding light on the nature of competition in the sector. This move was triggered by KKR’s application for approval from the European Commission, following which, the Commission has pledged to deliver a decision about the transaction by the end of May.
Should the initial probe give rise to serious apprehensions about competition, the EU body may potentially dive into a more in-depth investigation spanning four months. For this process, they will seek advice from a broader spectrum of the industry. The acquisition holds significance due to its reported valuation of €18.8 billion, involving all of TIM’s fixed fibre and copper network assets.
This sale aims to alleviate TIM’s hefty debt of over €26 billion by a significant €14 billion. Doing so would provide TIM with the necessary financial flexibility to effectively navigate through the intense competition in the market. If the deal gets the green light from regulators, it would position Italy as the first major European nation to part ways with its landline grid.
However, this plan doesn’t sit well with everyone. Vivendi, TIM’s largest stakeholder, has expressed their disdain for the deal. The French media powerhouse is currently in the midst of legal proceedings to contest the deal, claiming that TIM’s assets, estimated to be worth about €30 billion, are not being given their due monetary value.
