The biggest shareholder in Italy’s incumbent operator takes its fight to the European Union’s competition authority
The French conglomerate Vivendi has asked the European Union’s anti-trust authority to investigate Telecom Italia’s (TIM) sale of its fixed infrastructure unit. Vivendi, which owns a stake of just under 24% and 17% of the voting rights stake in TIM, has fiercely opposed the plan to sell the so-called NetCo to private investor KKR for up to €22 billion.
The exact sum is uncertain as more than €2 billion of the price depends on certain financial criteria being met in future.
Vivendi insisted the asset was worth more than €30 billion and is worries that there is little value left in the rump of the business without the fixed network infrastructure.
In December, after TIM announced the deal had been sealed, Vivendi issued a writ against TIM’s board, which the board dismissed.
Invoking EU law
Now, according to Reuters, Vivendi has asked the European Union Directorate General for Competition to look into the role played by the Italian Treasury in the NetCo sale process. The Italian government supports the sale.
Vivendi claims it was “unlawful”. Assuming its claim is not dismissed, this could hold up progress for years while an investigation takes place. KKR intends to notify the European Union’s antitrust authorities of its plans to buy Telecom Italia’s network assets by the end of January, Reuters reports.
TIM’s CEO, Pietro Labriola, was appointed to steer the deal through after years of turmoil in Telecom Italia’s boardroom. The operator desperately needs to reduce its debt mountain of about €26.3 billion. If the NetCo deal goes through, the operator expects to subtract about
€14 billion.
This could be even more if KKR can win TIM’s agreement to extend the deal to include Sparkle, the operator’s international infrastructure arm. In November, Reuters reported advisors for the operator and KKR discussed a valuation of around €750-800 million.
However, if the EU’s Directorate General for Competition wades into the melee, then this too is likely to be pulled into the DG’s net.