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Telecom Italia partnering with KKR on Open Fiber deal: sources
Posted on Thursday, 13 February 2020 13:06
Telecom Italia is to join forces with private equity giant KKR on an acquisition of Open Fiber, according to Bloomberg.

Citing people with knowledge of the matter who did not wish to be identified as the matter is private, the news provider said the company was close to selecting the investor due to its interest in the Telecom Italia’s secondary network.

Reuters also picked up on the news; sources told it that the private equity firm looks to have beaten off competition from the likes of Ardian, Macquarie, Wren House Infrastructure, Allianz, Goldman Sachs and Brookfield to partner with the Rome-headquartered group.

None of the parties involved have commented on the report.

A deal would take the form of an investment by KKR in a new entity to be formed through the combination of Telecom Italia’s fibre optic assets with Open Fiber, Reuters added.

The news provider’s sources said discussions between the Italian telecommunications player and the target’s shareholders have been taking place since the middle of last year without an agreement being reached.

Bloomberg reported that not all of Open Fiber’s investors are convinced by the prospect of a deal; Enel chief executive Francesco Starace told Boersen Zeitung that he did not plan to divest the firm’s stake in the business, Bloomberg noted.

However, a separate source told the news provider Cassa Depositi was open to the possibility.

Open Fiber was established in December 2015, initially to install, supply and operate high-speed optical fibre electronic fibre to the home communication networks throughout Italy.

The firm’s network has a connection speed of 1 Gbps, making it the most extensive in Italy, according to its website.

According to Zephyr, the M&A database published by Bureau van Dijk, there were 1,394 deals targeting telecommunications companies announced worldwide during 2019.

The largest of these by some distance was worth USD 14.30 billion and saw Digital Colony, EQT and Devonshire Investor, via FrontRange Topco, agree to pick up Zayo Group Holdings.

Other companies in the sector to have been targeted over the 12 months include Mindanao Islamic Telephone Company, Vodafone and Bharti Airtel.

© Zephus Ltd