😎 Summer Sale Exclusive - Up to 50% off AI-powered stock picks by InvestingProCLAIM SALE

Exclusive-EU concerned about KKR, Telecom Italia deal impact on wholesale competition, sources say

Published 23/04/2024, 18:36
© Reuters. FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo
TLIT
-

By Foo Yun Chee and Elvira Pollina

BRUSSELS/ROME (Reuters) - European Union antitrust regulators are asking rivals and customers whether proposed acquisition of Telecom Italia (BIT:TLIT)'s (TIM) fixed-line access network by U.S. investment firm KKR could hamper Italy's wholesale market, people familiar with the matter said on Tuesday.

Such regulatory worries could lead to a lengthy investigation of the deal and put pressure on KKR to offer significant remedies. Rivals have cited the risks of price hikes once the deal is completed.

KKR is buying TIM's domestic network for up to 22 billion euros ($23.5 billion) in a deal that would make the Italian telecoms group the first in a major European country to divest its landline grid.

TIM's landline network, or NetCo, covers nearly 89% of the country's households and its fibre and copper cables stretch over 23 million km (14.3 million miles) across the country. The sale is part of a government-backed plan aimed at cutting debt and reviving the group.

KKR last week sought EU antitrust approval for the deal, prompting the EU competition enforcer to send questionnaires to rivals and customers on Monday asking for feedback.

Respondents have until April 30 to reply to the 49-page document with 79 questions.

The document indicates that the European Commission has concerns about the viability of wholesale competition in Italy, the people said.

The Commission and KKR declined to comment.

The EU watchdog also had concerns whether the agreement between the two companies put at risk competition in Italy and also the risks of coordination in the market between NetCo and rival OpenFiber, which is controlled by Italian state lender CDP and Australian investment group Macquarie, they said.

The questionnaire also asked about the impact of the deal on business users, the people said. The Italian government plans to take 20% in NetCo to oversee an asset deemed of strategic importance.

© Reuters. FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo

TIM last week said it was on track to finalise the deal this summer. The Commission is scheduled to decide on the deal by May 30.

($1 = 0.9348 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.