TIM launches NetCo division following sale to KKR

Telecom Italia (TIM) has launched NetCo, the business unit that will be contributed to FiberCop at the closing of the transaction for the sale of the fixed network to the US-based private equity investor KKR which is expected in the summer of 2024.

TIM’s board approved KKR’s offer to acquire its fixed network, which gives NetCo excluding Sparkle an enterprise value of €18.8 billion

Under the deal, TIM will contribute a business unit consisting of primary network activities, wholesale activities and the entire equity investment in the subsidiary Telenergia – into FiberCop, a company that already manages activities relating to the secondary fibre and copper network, and the simultaneous acquisition by Optics BidCo (a vehicle controlled by KKR) of TIM’s entire equity investment in FiberCop.

The business unit includes the fixed network infrastructure and related real estate, the management of which it will oversee, the wholesale business and the entire stake in the subsidiary Telenergia.

Vivendi, a major shareholder in TIM expressed its disappointment in the deal, after it shared in a letter that “shareholders’ rights have been trampled on” in an agreement that was approved without informing and requesting a vote by shareholders. The french media giant said it will take further legal action against the Italian telco.

TIM said the new division consists of more than 20,000 people, of whom more than 19,000 already work in the Wholesale & Network area, while another about 900 come from TIM’s Staff functions. Telecom Italia expects to employ a total of about 16,300 staff, corresponding to about 17,500 people, and will include the mobile network component on a competence basis.