Advisor to Telecom Italia in the context of the landmark EUR20bn+ disposal of Netco to KKR

Telecom Italia (“TIM”) sells NetCo to Optics BidCo (vehicle controlled by KKR), where Mediobanca acted as Financial Advisor to TIM.

Mediobanca acted as Financial Advisor to Telecom Italia (“TIM”) for the sale of NetCo to Optics BidCo (vehicle controlled by KKR), approved by TIM BoD on November 5th, 2023.

TIM will contribute the primary network to FiberCop (already owning secondary fibre and c  opper network). Simultaneously, Optics BidCo will acquire the entire stake held by TIM in FiberCop.

The transaction values NetCo at an Enterprise Value up to EUR 22bn and allows TIM to reduce its debt by approximately EUR 14bn, thus reducing TIM’s leverage post transaction to <2.0x.

As part of this Transaction, KKR is working in partnership with the Italian Ministry of Economy and Finance and F2i in the spirit of safeguarding the national and strategic nature of NetCo and overseeing a business plan for NetCo aimed at expanding and accelerating NetCo’s fiber network roll-out.

Closing is expected in summer 2024, subject to completion of the contribution of the primary network, antitrust authorization, authorization in the matter of distorting foreign subsidies and Golden Power.

Mediobanca advised TIM throughout this journey and throughout all of transaction steps: 

  • Summer 2022: presentation to the market of the “delayering plan” (separation of the fixed-network infrastructure assets overcoming vertical integration) and bilateral negotiations with Open Fiber (TIM NetCo competitor) and its shareholders CDP and Macquarie for a straight sale of NetCo to Open Fiber. Bilateral transaction eventually withdrawn following the appointment of the new Italian Government in late 2022.
  • February/March 2023: TIM received non-binding offers from KKR and the CDP/Macquarie Consortium for the acquisition of NetCo. Each offer has been increased several times.
  • July 2023: TIM's BoD selected KKR as preferred bidder and granted exclusivity allowing extensive due diligence process and transaction negotiation.
  • October 15th 2023: KKR submitted a Binding Offer for NetCo and a non-binding offer for Sparkle.
  • November 5th 2023: TIM BoD approved the sale of NetCo to Optics Bidco/KKR and mandated the CEO to negotiate an ameliorative offer for Sparkle.
  • November 6th 2023: Signing of the Transaction Agreement.

Mediobanca’s Debt Division supported the company in (i) assessing the financial sustainability of the transaction through an in-depth rating analysis including the related dialogue with rating agencies and (ii) structuring a potential liability management exercise on certain bonds issued by TIM; such activities are ongoing and expected to continue until closing in 2024.

This transaction represents: 

  • A €20bn+ landmark transaction: (i) Largest TMT deal in Italy over the past 5 years; and (ii) 3rd largest deal in Italy over the past 5 years;
  • Further confirmation of Mediobanca’s unparalleled expertise and track record in European TMT / TLC infrastructure sectors (both in corporate finance and debt);
  • Another example of the strategic relevance of Private Capital in European M&A where Mediobanca has built a strong track record having announced in Italy 13 transactions involving Large Financial Sponsors and infrastructure funds in 2023YTD.

A demonstration of the importance cooperation throughout the whole CIB to execute successfully complex transactions.

Mediobanca Group