TIM finally tables KKR proposition, launches new venture fund

News

KKR has reportedly offered €1.8 billion to buy 38% of TIM’s secondary copper and fibre network, having expressed interest in acquiring a stake in the local loop in March.

TIM said it will present the binding offer presented by the KKR Infrastructure fund for a minority share in the newly created corporate vehicle, intended to remain under the control of TIM as the transferee of the company’s secondary network, on the agenda for the next Board of Directors’ meeting on 4 August.

Board decision

The company said it will provide details of the potential transaction following the decisions of the Board of Directors.

 In March, TIM announced its intention to sell a minority stake in some of its fixed-line assets KKR & Co. for about €2 billion.

Previously, in February, TIM named KKR as its exclusive partner to deploy ultra-fast broadband and help it compete better against fibre-only rival Open Fiber as the long running merger talks between TIM and Open Fiber had stalled. The deal remains attractive for all parties if the merger with Open Fiber finally goes ahead.

Economy Minister Roberto Gualtieri has sought to bring an end to the deadlock over governance and other issues, asking TIM and Enel to reach a preliminary agreement by the end of July regarding the formation of one network unit.

Increased government holding?

As previously reported, the minority sale of a stake in the copper local loop could result in CDP – the state’s bank – taking a stake in TIM’s last-mile networks to balance KKR’s ownership in part of the critical national infrastructure. CDP is already an investor in TIM, owing 10%.

Under a plan the government is studying, any combined merger of could initially be majority owned by Telecom Italia but would grant equal access to all market players, a source told told Reuters.

Investing in 5G innovation

Through TIM Ventures, the operator signed an agreement with United Ventures, which specialises in funding digital technologies, to launch a new fund called UV T-Growth. United Ventures was founded by Paolo Gesess and Massimiliano Magrini.

The new fund is to support investments in established enterprises and SMEs to develop technological projects in Italy and abroad, with a particular focus on 5G technology.

According to TIM, “This operation will see TIM Ventures strengthen its strategy in the Venture Capital world with a view to creating increasing synergies and opportunities for collaboration with the innovation ecosystem.”

UV T-Growth will invest in late stage innovative enterprises mainly in Italy and Europe and is particularly interested in technological areas aligned with TIM's own 5G-related strategies – cloud solutions, IoT, edge computing, AI and virtual reality.