Spain's Telefonica takes control at Telecom Italia

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Spain's Telefonica takes control at Telecom Italia

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Control of Italy’s biggest telecoms operator, Telecom Italia, has been bought by a consortium led by the Spanish communications giant Telefonica. They have bought the holding company Olimpia, which owns 18 per cent of Telecom Italia for 4.1-billion Euros, plus debt, valuing the shares at 2.82 euros each – that is a premium of about 25 per cent on Friday’s closing price. Along with Telefonica’s partners – some of which already own part of the Italian company – the stake now held by the consortium is just shy of 24 per cent.

Pirelli had owned 80 per cent of the Olimpia holding company since 2001, along with the Benetton family. Since last summer, the tyre giant has being looking to stem the 3-billion euros in losses it has made on the investment. The new holding company – Telco Spa – will be 42.3 per cent Telefonica owned, with the rest divided up among Italian banks and Benetton

Pirelli got 3.3-billion euros from the sale – the company says it will invest it in its tyre and property businesses. It is the fourth time since it was privatised ten years ago that Telecom Italia has changed hands. The Italian government had wanted the company to remain under Italian control.