Company News

Telecom Italia set to pick KKR as partner in Open Fiber deal - sources

MILAN, Feb 13 (Reuters) - Telecom Italia (TIM) is set to pick private equity firm KKR to help it to create a national fibre-optic champion with Open Fiber, two sources familiar with the matter said on Thursday.

One of the sources said TIM was close to selecting KKR because the U.S. investment firm had also expressed an interest in investing in the former phone monopoly’s secondary network - the part that connects street cabinets to subscribers’ homes - which it values at 7.0-7.5 billion euros ($7.6-$8.2 billion).

KKR declined to comment.

TIM has asked infrastructure funds to evaluate a joint investment in the ultra-fast broadband entity it is looking to create by combining its fibre optic assets with Open Fiber’s.

Talks with Open Fiber’s shareholders have been dragging on since mid-2019, but an accord on the structure of the deal has proven elusive.

Open Fiber is controlled by utility Enel and state lender Cassa Depositi e Prestiti (CDP).

Big funds, including Ardian, Macquarie, Wren House Infrastructure, Allianz, Goldman Sachs, KKR and Brookfield tabled non-binding proposal to work alongside TIM before Christmas, a source had told Reuters.

Bloomberg News first reported TIM was close to picking KKR as a co-investor.

$1 = 0.9193 euros Reporting by Elvira Pollina; additional reporting by Elisa Anzolin; editing by Mark Potter