State will impose financial penalty of less than €300 million on French firm after control ruling, source claims

The Italian government will fine Vivendi for breaking the rules regarding its stake in TIM, but will not impose too hefty a penalty, it emerged late last week.

Italy will hit the French media group with a fine not exceeding Italy will hit the French media group with a fine not exceeding €300 million, Reuters reported on Friday, citing an unnamed source.

"One cannot make the companies bleed," the newswire quoted its informant as saying.

Government officials are meeting on Monday to formally discuss levying a fine on Vivendi.

Earlier this month Italian market watchdog Consob ruled that despite having a shareholding of less than 50%, Vivendi exercises de facto control of TIM, formerly known as Telecom Italia.

The French firm is able to control TIM’s board and the direction of its shareholder meetings, Consob said.

TIM plans to appeal the verdict.

The ruling, if it is upheld, means that Vivendi failed to comply with regulations requiring it to inform the government of a change in control at the telco. As such, the state can take action against it, including imposing a fine.

There is also the possibility of asset sales to consider. According to media reports last week, the state could seek to force the spin-off or even sale of wholesale network operator TI Sparkle, whose extensive network infrastructure makes it a strategic national asset.

The Reuters report did not comment on the likelihood of such a move though.