Italian government wants say on TIM takeover

The Italian government has said that it wants to control TIM’s key strategic assets in the event of any takeover. 

The leading Italian operator, which owns the country’s largest telecoms infrastructure, received a €10.8 billion approach from US-based investment company KKR in late 2021. The deal would take the financially struggling TIM private, offering a 45.7% premium to the ordinary shares’ closing price in November.

The Italian government owns a 10% stake of TIM through Treasury-owned state lender Cassa Depositi e Prestiti (CDP). The government’s approval is required for any takeover to go through, with Rome having the power to block any deal involving assets deemed to be of national interest.

Speaking at a press briefing, industry minister Giancarlo Giorgetti said that the government “respects the market but any takeover bid must take into account a framework within which the state cannot relinquish control”.

TIM’s biggest shareholder Vivendi has rebuffed the bid, saying that it does not reflect TIM’s value.

The proposal includes the separation of TIM’s network assets – a move that lines up with the treasury’s ambitions to merge TIM’s fixed network assets with Open Fiber to create a wholesale-only unified network operator.

Pietro Labriola, the general manager of TIM, is reportedly the frontrunner to lead such an operator as its CEO, and is said to be drafting a business plan which would serve to assess KKR’s offer.

This new proposed operator, which would be operated by CDP, has been criticised by innovation minister and former Vodafone CEO Vittorio Colao, who argued that competition is the best way to promote fibre expansion.