Telefonica currently owns 46 percent of holding company Telco and will pay a starting sum of 324 million euros to control up to 66 percent. The remaining shares of Telco are held by Italian banks Intesa Sanpaolo and Mediobanca.
In a second phase, the Spanish carrier will have the right to continue buying the rest of the shares from its Italian partner. This prevents Carlos Slim, through America Movil, or American competitor AT&T from taking positions in the Italian market.
Telecom Italia was once the national telephone company, one of the very few big companies under national control, but for a while it has been struggling with a hugely competitive market and the economic crisis. In March, it posted a net loss of 1.627 billion euros for 2012, hit by an asset write-down of more than 4.4 billion euros in part on investments in Brazil, AFP reports.
Italians showed mixed feelings about the deal:
“The Telefonica-Telecom deal is an important turning point for our industrial future,” said Marcella Panucci, director general of Italy’s employers lobby Confindustria said to AFP.
Luigi Angeletti, general secretary of the Italian Labour Union pointed out it was “another hard blow” for the country that will destroy more jobs.
As the events unfold, some analysts wonder whether this deal will take longer than we think.
“Is this really the end to one of corporate Italy’s many ongoing sagas?,” FT’s Lex wondered on Tuesday.