Italy Clears €22 Billion Telecom Italia Sale to U.S. Fund KKR Under National Security Rules
Italy’s government has given its clearance for Telecom Italia’s planned sale of its fixed-line network to U.S. fund KKR, marking a transaction valued at up to 22 billion euros ($23.92 billion). The green light for the deal comes under Italy’s so-called golden power rule, which grants the government the authority to intervene in strategic business transactions for national security reasons. The telecoms group, TIM, announced the approval on Wednesday.
According to TIM, the government’s consent follows commitments made by both Telecom Italia and KKR, which were deemed by the authorities as “fully adequate to guarantee the protection of the strategic interests connected with the assets involved in the transaction.”
In a separate statement, the Italian government highlighted that the approved commitments would empower the administration to oversee the newly-formed network company in areas related to national security and defense. The measures are designed to ensure that Italy maintains control over critical infrastructure and safeguards against potential threats.
Related: Telecom Italia Enters Exclusive Talks With KKR For Grid Sale
The obligatory commitments include the establishment of a security task force responsible for overseeing the operations of the network company. Additionally, Telecom Italia and KKR have pledged to uphold all activities linked to the maintenance and monitoring of the infrastructure within Italy. These measures are crucial for addressing concerns related to the protection of sensitive information and maintaining the integrity of the nation’s communication networks.
The government’s insistence on these commitments underscores the importance of balancing foreign investments with national security considerations. The creation of a security task force and the commitment to retaining control over maintenance and monitoring activities demonstrate the collaborative efforts between the companies and the Italian authorities to address potential security risks associated with the transaction.
This approval paves the way for Telecom Italia to proceed with the sale of its fixed-line network, providing the company with a substantial financial boost. The 22 billion euros generated from the transaction will likely contribute to Telecom Italia’s strategic initiatives and investments in emerging technologies.
As global business transactions continue to face scrutiny in the context of national security, the Telecom Italia-KKR deal stands as a testament to the significance of regulatory frameworks that seek to protect strategic assets while fostering international investments.
Source: Reuters
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