Italy’s Telecom Italia (TIM) has completed the sale of its fixed-line business, NetCo, to private equity firm KKR. Following the announcement on 24th June 2024, this transaction involved transferring TIM's fixed network infrastructure and wholesale activities to FiberCop, a 58 percent owned subsidiary, and then KKR's subsidiary, Optics BidCo, acquiring FiberCop.
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Overview of the Transaction
The sale of NetCo, valued at up to EUR 22.0 billion, including earn-outs linked to the fulfilment of certain conditions, allows TIM to reduce its net financial debt by EUR 14.2 billion, pending post-closing adjustments, the official release said.
Access and Service Agreements
TIM will maintain access to the network through a 15-year term Master Service Agreement (MSA), which is renewable for a further 15 years. The services included in the MSA will be provided at market prices and without any minimum purchase commitments.
"As the first European mover, we chose to separate the fixed network infrastructure services from the other services we provide, to ensure the best, most sustainable, and fastest possible development of TIM," TIM said.
"TIM will remain the reference Telco in Italy and will continue to be the country’s most infrastructure-rich operator, offering innovative services across both fixed and mobile platforms, serving families, the Public Administration, and businesses."
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Future Plans
TIM hopes that the transaction provides it with the opportunity to adopt a new business model that will allow the Group to compete more effectively in the consumer and enterprise markets in Italy. KKR entered exclusive talks with TIM in June 2023 regarding the deal.
