KKR offers TIM €1.8bn for minority stake in ‘last mile grid’

The Italian government has long been hungry for TIM to consolidate its fibre business with that of state-owned Open Fiber, a move which would greatly increase efficiencies throughout the country. TIM, however, has been reluctant to do so and has repeatedly resisted government pressure, preferring to maintain control of its own infrastructure. As a result, formal negotiations to merge the two fibre businesses had collapsed at the start of this year.

However, in February, TIM revealed that it had been approached by US investment firm KKR, who were seeking a 40% stake in the Italian operator’s new access network business, known as FibreCorp. Now, the offer has been confirmed, with KKR offering €1.8 billion for a 38% stake.

This new investment should be music to the Italian governments ears, increasing the possibility of merging FibreCorp with Open Fiber; Italian state bank CDP, which owns stakes in both companies, has reportedly been mulling increasing its equity ownership of TIM from its existing 10% in order to balance KKR’s pending investment. 

A new government plan could go some way to meet TIM in the middle with regards to its ownership demands, allowing it to be the majority owner of the merged entity, so long as it provides equal access to all players in the market, sources told Reuters last week.

It would appear that TIM is gradually coming round to the government’s idea of a single, national fibre network, but it will fight hard for the right to own that network. 

Source: Total Telecom