TIM (Telecom Italia) and CDP Equity (Cassa Depositi e Prestiti) signed a non-binding memorandum of understanding (MoU) for the sale of TIM’s fixed network assets, through a merger with Open Fiber, of which CDP Equity is the controlling shareholder. Also, the MoU was supported by KKR Infrastructure, a 37.5% joint venture partner to TIM in FiberCop, as well as Macquarie Asset Management (MAM), a 40% joint venture partner to CDP Equity in Open Fiber.

Importantly, CDP Equity owns the remaining 60% stake in Open Fiber and a 10% stake in TIM. However, following the signing of the MoU, Vivendi, which is TIM’s largest shareholder (24% ownership), stated that it does not support the sale of TIM’s fixed network to CDP Equity, based on its reported valuation of €17bn to €21bn ($18.3bn to $22.6bn).

Should the proposed transaction proceed, TIM would sell its fixed network assets, creating a merged company which would reportedly have an ownership structure within the following ranges:

  • CDP Equity: 70% to 77% ownership
  • KKR Infrastructure: 12% to 15% ownership
  • Macquarie Asset Management (MAM): 10% to 13% ownership
  • Fastweb: 1% to 1.5% ownership

Finally, both TIM and CDP Equity expect to reach a binding deal by the end of October 2022.

TIM’s Sale Initiates Single Fixed Network Operator in Italy

TIM is currently in the process of separating its business into two entities: i) Consumer and Enterprise businesses, together with TIM Brasil (ServCo) and ii) national and international wholesale business & assets (NetCo):

TIM ServCo NetCo Domestic Perimeter

Transaction Perimeter

By TIM selling its fixed network assets, the new CDP Equity-controlled entity would become Italy’s single network operator, comprising the following:

  • TIM’s fixed network infrastructure
  • FiberCop: last-mile fiber network which targets covering 60% of homes in Italy by 2026, equivalent to 17.5m fiber-to-the-home (FTTH) passings. In 2021, FiberCop generated revenues €977.7m and EBITDA of €852.7m
  • Open Fiber: wholesale operator of fiber-optic networks which intends to pass ~24 million total households in Italy with fiber by 2031, equivalent to 90%+ household coverage. In 2021, Open Fiber produced revenues of €380m and EBITDA of €152m

Use of Proceeds

TIM intends to use the proceeds from a sale of its fixed network infrastructure to significantly reduce its leverage, which currently stands at €17.7bn of adjusted net debt after leases, as of Q1 2022. Additionally, the capital infusion would help fund TIM’s “transformation” plan under CEO Pietro Labriola.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables. Jonathan has over 8 years of experience in research and writing for Fiber.


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