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The Italian government has already approved the deal after agreeing with KKR to take a stake of up to 20% in the business once the transaction is complete
The EU competition authority has given KKR the green light for its planned takeover of Telecom Italia (TIM)’s fixed network operations (known as NetCo) for €19 billion.
The European Commission was notified of the deal on April 19 and officially approved the merger in a statement yesterday, having completed a full investigation.
“The Commission investigated the impact of the transaction on the market for wholesale broadband access services in Italy and concluded that it would not significantly reduce the level of competition,” read the statement.
Specifically, the commission concluded that:
– The number of networks and providers will stay the same, preventing KKR from limiting access to infrastructure services. Existing agreements with rival companies such as Fastweb and Iliad will ensure competitive conditions remain in the market.
In addition, NetCo and Open Fibre, Italy’s second-largest fixed broadband provider, will keep competing for customers and expanding their networks, driven by competition from Fastweb.
Approval of the deal comes just weeks after TIM reportedly presented a raft of remedies to the European Commission to get it over the line. The specifics of these remedies were not revealed, but anonymous sources speaking to Bloomberg said the measures would likely solve EU concerns over possible price hikes in the wholesale market.
The acquisition may still face opposition from Vivendi, TIM’s largest shareholder. The company has been vocal in its disapproval of the deal and has said it will use “any legal means at its disposal” to challenge it. The company believes that TIM’s assets are worth around €30 billion and are therefore being undervalued.
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