By Foo Yun Chee
BRUSSELS (Reuters) -U.S. investment firm KKR secured unconditional EU antitrust approval on Thursday for its 22-billion-euro ($24 billion) acquisition of Telecom Italia’s (TIM) fixed-line network.
The deal is significant as it marks the first time that a big telecoms operator in a major European country is divesting its landline grid, potentially paving the way for others to follow suit.
The European Commission’s announcement confirmed a Reuters’ story last week.
“The Commission investigated the impact of the transaction on the market for wholesale broadband access services in Italy and concluded that it would not significantly reduce the level of competition,” the EU executive, which also acts as the EU antitrust watchdog, said in a statement.
KKR has sought to address concerns of Telecom Italia’s rivals about those rivals’ existing contracts put in place after the creation of FiberCop, Telecom Italia’s last-mile grid unit, and has offered a pledge to keep them on the same terms and prices, people with direct knowledge of the matter have told Reuters.
This informal remedy has also allayed EU worries, they said.
The Commission said a master services agreement (MSA) that will govern the relationship between NetCo (the grid acquired by KKR) and TIM post-transaction is not an integral part of the transaction, as it is not an agreement through which KKR acquires control over NetCo.
Some rivals including Vodafone had voiced concerns about the master services agreement.
TIM’s landline network covers nearly 89% of households in Italy and its fibre and copper cables stretch over 23 million kms (14.3 million miles). The grid sale is part of a government-backed plan to cut Telecom Italia debt.
($1 = 0.9245 euros)
(Reporting by Foo Yun Chee; Editing by Susan Fenton)
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