Italy’s government has cleared Telecom Italia’s (TIM) (TLIT.MI), opens new tab planned sale, worth up to 22 billion euros ($23.92 billion), of its fixed-line network to U.S. fund KKR (KKR.N), opens new tab under the so-called golden power rule, the telecoms group said on Wednesday.
TIM said the approval came after the companies made commitments which the government deemed to “be fully adequate to guarantee the protection of the strategic interests connected with the assets involved in the transaction.”
In a separate statement, the government said the proposed commitments ensure the Italian administration will have the power to oversee the newly-created network company in areas concerning national security and defence.
The commitments, which the government made obligatory, include the creation of a security task force overseeing the network company and the pledge to maintain all activities linked to the maintenance and the monitoring of the infrastructure in Italy, the government said.
Golden power legislation allows Italy to intervene in deals that involve sectors considered strategic, such as banking, energy and telecommunications.
Italy’s former phone monopoly agreed in November to sell its prized landline grid to the U.S. fund in a landmark deal that is aimed at significantly reducing TIM’s debt and staff.
While supported by the Italian government, which plans to take a 20% stake in the network company, the deal is being challenged in court by top TIM investor Vivendi, opens new tab.
TIM expects to finalise the deal by the middle of the year. Reuters