Italy is set to approve a decree Monday which will allow the government to take a stake in Telecom Italia SpA’s network business, part of an effort by Prime Minister Giorgia Meloni’s government to assert more control over strategic assets.
The government is finalizing the decree backing an agreement with US private equity firm KKR & Co. to jointly control Telecom Italia’s grid, according to people familiar with the matter. Under the deal, Italy is entitled to take as much as 20% of the business, the most valuable in the former monopoly’s portfolio.
The decree could be made public after a cabinet meeting in Rome Monday evening, but a final decision has not been taken, added the people, who asked not to be identified discussing confidential information. KKR signed a preliminary agreement this month to include the government in its €23 billion bid for the network and the decree completes the deal.
Telecom Italia put the business up for sale in an effort to trim gross debt of more than €30 billion. It has been grappling with a complex mix of high labor costs and the need for ever-expanding investments to modernize infrastructure. The Italian government has the right to veto deals involving what it considers strategic assets. Its push to protect Telecom Italia’s 40,000 employees has meant that Meloni and her team have been heavily involved in the process.
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