The government approved the deal under “golden power rules” that allow it to impose certain conditions and veto deals and investments in sectors deemed strategic. These sectors include energy, communications, and financial services.
TIM said in a statement that it has received approval to execute the transaction it approved in November.
TIM said it was approved after both companies made commitments that the government determined were “sufficient to ensure the protection of the strategic interests associated with the assets involved.”
This approval was granted on the basis that the commitments made by TIM and KKR were “sufficiently adequate to ensure the protection of the strategic interests associated with the assets involved in the transaction”.
The commitments made by KKR and TIM will give the Italian government some level of oversight over the new netco.
A special committee on security will be established to oversee its activities, including areas related to national security and defence.
The sale is part of TIM’s debt reduction strategy, with the deal potentially eliminating up to 14 billion euros.
However, media company Vivendi, which owns 24% of TIM shares, has slammed the deal and is demanding a higher price for the network’s assets.
The company claimed the deal was illegal and called for a shareholder vote on the decision after it was approved by TIM’s board in November.
Vivendi has filed a lawsuit against TIM, and although it is not seeking an immediate termination of the contract, it is reported that the first hearing could be scheduled for April.
TIM hopes to complete the transaction by summer 2024, and while the court could delay completion, Vivendi could also sell its shares in TIM.
Bloomberg reported in December that a sale may be on the cards, but the initial investment of 4 billion euros for a 24% stake would be a blow to Vivendi, which is currently worth 1.3 billion euros.
Vivendi originally acquired a stake in TIM in the same year as part of a separate broadband deal and paid €3.9 billion in additional shares between 2015 and 2016.
Selling the stake at the current share price would represent a huge loss for Vivendi, but given today’s announcement and the company’s willingness to acquire a stake in the network, the state clearly favors the deal over the line. .