FACTBOX: Key facts about T.Italia and Telefonica

(Reuters) - Pirelli sold its Telecom Italia (TLIT.MI) interest on Saturday to Telefonica and a group of Italian banks that will have majority control ensuring the phone group remains in domestic hands.

The agreement thwarts interest by Mexico's America Movil and ends months of tensions between Italy's government and Pirelli, which bows out after losing more than 3 billion euros ($4.08 billion) on the investment it made 6 years ago.

Telefonica (TEF.MC), investment bank Mediobanca MBDI.MI, insurer Generali (GASI.MI) and Sintonia, an investment company of Italy's Benetton family, will buy Olimpia from Pirelli (PECI.MI) for 4.1 billion euros in cash, valuing the holding 6.8 billion euros.

KEY FACTS OF THE DEAL

* The buyers will form a new company, to be called Telco, which will include Olimpia's 18 percent stake in Telecom Italia as well as Generali's 4 percent and Mediobanca's 1.6 percent for total of 23.6 percent of Italy's largest telecoms group.

* Telefonica will pay 2.31 billion euros for 42.3 percent of Telco, giving it a 10 percent indirect stake in Telecom Italia and two seats on its board.

* Italian investors will hold 57.7 percent of Telco and name its chairman and 13 of the 15 board Telecom Italia board members that Telco can name.

* Generali will have 28.1 percent of Telco, Mediobanca 10.6 percent, Intesa Sanpaolo (ISP.MI) 10.6 percent. The Benetton family, which had 20 percent of Olimpia, will hold 8.4 percent of Telco.

* Pirelli said it expects the agreement to be finalized by October.

KEY FACTS ABOUT TELEFONICA:

- Spain's Telefonica, the world's fifth largest telecoms group by market capitalization, is on a spending spree to raise its global profile.

- The Telecom Italia deal follows purchases of firms such as Britain's O2 and Czech telecoms group Cesky Telecom SPIIsp.PR.

- Telefonica is the leading telecoms carrier in the Spanish-Portuguese speaking market and the Italian deal could give it extra clout in Brazil, Argentina, Bolivia and Cuba where Telecom Italia has fixed, mobile and internet operations.

- Telefonica is already the leading operator in Brazil and it is unlikely Brazilian regulators would allow a merger of its operations with those of Telecom Italia's Tim Brasil. A 50-50 joint venture could be a possibility

- The deal could stretch Telefonica's European presence from current markets in Britain, Ireland, Germany and Czech Republic into France, Holland and Germany where Telecom Italia has fixed, mobile and internet operations.

- Telefonica is expected to seek two seats on the Telecom Italia board, according to Spanish press reports.