The Italian government has put on hold potential investments by private equity firm CVC and French telecom operator Iliad in Telecom Italia (TIM), as it prioritizes domestic consolidation efforts, sources told Reuters. 

State-backed financial conglomerate Poste Italiane is set to acquire state lender CDP’s 9.8% stake in TIM, with an official announcement expected soon. Poste, which operates its own mobile services but lacks network infrastructure, could play a key role in future industry consolidation. Both TIM and Poste declined to comment.

CVC had been in talks to acquire Vivendi’s 24% stake in TIM, positioning itself as the company’s largest investor. Meanwhile, Iliad explored a merger of its Italian operations with TIM. However, government officials were unresponsive to both proposals, signaling a reluctance to approve foreign control over TIM, sources said.

CVC was reportedly close to finalizing a deal with Vivendi but could not secure the necessary pre-approval from the government. Similarly, Iliad has yet to obtain official backing for its proposal. Vivendi and Iliad both declined to comment.

The Italian government views TIM as a strategic asset, meaning any significant ownership changes require its approval. Under Italy’s regulations, any investor seeking to acquire more than 3% of TIM’s capital must obtain government clearance.