September 27, 2017 / 9:04 PM / 10 months ago

UPDATE 1-Telecom Italia set to appoint Amos Genish as CEO - sources

(Adds details, context)

MILAN, Sept 27 (Reuters) - Telecom Italia (TIM) is set to name Amos Genish as its new CEO, four sources close to the matter said on Wednesday, a choice suggesting French media group Vivendi is cementing its authority over the Italian phone group.

Genish was appointed general manager for operations at Telecom Italia (TIM) in July after the phone group parted ways with former CEO Flavio Cattaneo following clashes with Vivendi, TIM’s top shareholder with a 24 percent stake.

The new appointment would likely be made official at a board meeting on Thursday, the sources said, although last minute changes were possible.

Vivendi CEO Arnaud de Puyfontaine would retain his position as TIM’s chairman, two of the people added.

One of the sources said TIM’s deputy chairman Giuseppe Recchi could also retain his post and remain responsible for international wholesale unit Sparkle.

Keeping Sparkle in Italian hands is regarded as crucial by the Rome government because the unit’s submarine network transmits sensitive information between countries in Europe, the Mediterranean and the Americas.

Telecom Italia could not immediately be reached for comment. Vivendi declined to comment.

The possibility of Genish eventually becoming CEO was already hinted at by sources after his appointment as general manager.

However, the sources said at the time that TIM and Vivendi might opt for an Italian for the job instead to smooth relations with Rome, where Vivendi’s growing influence on Italian business is already under scrutiny after its stake building at both TIM and broadcaster Mediaset.

The news of Genish’s likely appointment came on the day that France and Italy finally patched up a separate dispute over shipbuilder Fincantieri’s acquisition of a controlling stake in STX France.

It also comes a day before Italian government officials are due to meet to discuss whether to sanction Vivendi on the grounds that it failed to notify Rome of its effective control of TIM. Vivendi has repeatedly denied controlling Italy’s biggest phone group.

It was unclear whether the Italian-French deal on STX France could smooth the way for a compromise on Vivendi’s role in TIM.

One of the sources said on Wednesday the choice of Genish - a favourite of Vivendi chairman Vincent Bolloré - for the CEO job could again ruffle feathers in Rome. Genish was Vivendi’s chief convergence officer before his July appointment at TIM.

The Italian state has no stake in TIM, but would prefer an Italian to play a senior role in overseeing a business that holds strategic communication assets, sources have said.

Meanwhile Vivendi has taken an increasingly hands-on approach to TIM since winning two-thirds of board seats this year and appointing de Puyfontaine as executive chairman.

Cattaneo’s departure after only 16 months in the job was seen as another sign of the French group tightening its grip.

However, some investment funds that hold TIM shares have taken Genish’s arrival at TIM in their stride, betting on the former Israeli army captain to complete the company’s overhaul with a burst of deals - from a possible sale of its Brazilian unit to a spin-off of the Italian fixed-line network. (Reporting by Danilo Masoni, Silvia Aloisi and Paola Arosio in Rome, Mathieu Rosemain in Paris; writing by Agnieszka Flak; editing by Mark Heinrich)

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