Debt-laden Telecom Italia has signed a preliminary agreement with investors to merge its fixed network assets with smaller rival Open Fiber, paving the way for an Italian single broadband champion.
The deal with investors including state-owned CDP, Macquarie and US private equity group KKR comes after months of uncertainty over the future of Italy’s largest telecoms operator. The sixth management shake-up in less than a decade follows three profit warnings in 2021 and a non-binding takeover offer by KKR, which was rejected.
The move, which would combine broadband with fixed network assets, is a coveted project in Rome. The government hopes it will spur the rollout of ultrafast internet across Italy as part of a post-pandemic recovery plan that would upgrade the country’s digital infrastructure.
At the same time, Telecom Italia wants to reduce its enormous net debt of €17.7bn and increase profitability.
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