This would be the largest acquisition of a private equity firm in Europe to date.
American private equity firm KKR plans to buy the former Italian telephone monopoly Telecom Italia for € 33 billion.
According to Reuters, this would be the largest acquisition by a private equity firm in Europe to date.
KKR announced a takeover bid to buy Telecom Italia on Sunday. The telecom operator is highly indebted and has been in financial difficulties for years.
KKR’s bid values Telecom Italia at EUR 10.8 billion, excluding the company’s EUR 22.5 billion debt burden. The offer is conditional on Italian state aid.
The tender offer is approximately 45 percent higher than Telecom Italia’s closing price on the Milan Stock Exchange on Friday. Telecom Italia’s share rose 30.3 percent on Monday.
KKR described the offer as “friendly”. However, that would mean that the French media company Vivendi, which owns 24% of Telecom Italia, would have to make a large write-down of its holding if it sold its stake to KKR.
KKR said it would execute the offer if it acquired a 51% stake. Thus, the company does not necessarily need to obtain Vivendi’s approval for the acquisition.
Telecom Italia is important for the Italian government’s project to expand broadband connections in Italy because it owns the country’s backbone network.
The Italian state has a special right to prevent foreign companies from buying strategic companies.
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