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TIM, CDP sign Open Fiber merger

TIM sign generic 16.9.jpg

Telecom Italia (TIM) has signed an agreement with state investor CDP to combine its fixed network assets with Open Fiber.

The merger will extend ultra-fast broadband across Italy, while paving the way for one network in the country somewhere down the line.

Under the plan, TIM will merge its fixed network with CDP-owned Open Fiber and this deal was supported by US hedge fund KKR, which has shares in TIM’s FiberCop fixed-line business and Macquarie Asset Management, which holds a stake in Open Fiber.

It is expected that TIM selling its network infrastructure will give it the funds needed to develop data and connectivity services for its customers, while it also battles heavy debt.

A deal will be subject to a TIM shareholder vote and the approval of EU antitrust authorities and any deal could take around two years to complete.

Earlier this year, it was revealed that TIM CEO Pietro Labriola had been devising a plan to avoid a full takeover by KKR, but opened the door to spin-off its infrastructure assets.

The Italian telco then announced that it would exploring a potential merger with CDP in April before partnering with Open Fiber to connect 500,000 homes in a deal worth €200 million.

That deal “marks the start of a new phase in the relations between the main Italian infrastructure operators and aims to ensure a more efficient use of resources,” the companies said in a statement.