The Italian government has approved Telecom Italia’s (TIM) sale of its fixed line network to US investment firm, KKR, noting that KKR’s ownership does not violate the state’s ‘Golden Power’ rules, which are intended to protect strategic assets.
Italy’s so-called ‘Golden Power’ legislation empowers the government to restrict or intervene in foreign corporate transactions involving stakes in Italian strategic assets, such as those related to national security, infrastructure, and defense.
The government has confirmed that the proposal is “fully adequate to guarantee the protection of the strategic interests connected with the assets involved in the transaction,” according to a statement from TIM.
According to a separate statement from the government, the approval came after the two companies agreed that the government should have the authority to oversee NetCo in areas relating to defense and national security. This includes establishing a new security taskforce to oversee the company’s ongoing operations.
Last year, TIM decided to sell its fixed-line network to KKR for EUR 28.8 billion, primarily to reduce its debt pile, which now stands at EUR 26 billion.
Vivendi, TIM’s biggest shareholder with a 23.75% stake, openly opposes the deal. They argue that TIM’s assets are valued at EUR 30 billion and, as a result, are being undervalued. The firm also claims TIM failed to request a shareholder vote on the decision, which they say violates applicable governance rules. The company stated in a press release that it will use “all legal means at its disposal” to challenge the decision, but these concerns have done little to stymie the deal’s progress.
TIM expects to finalize the deal by the middle of the year.
