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A Canadian investment fund has committed to investing C$2.9 billion ($2 billion) for a minority stake in Telecom Italia’s (TIM) fixed network business Netco, agreeing to a deal to buy the entire business unit from the company. Participated in a consortium led by KKR.
Canada Pension Plan Investment Board (CPP) announced that it has entered into an agreement to join KKR’s Optics Bidco Investor Group, giving the company a 17.5% interest in the fixed business.
The investor group, which also includes a wholly-owned subsidiary of the Abu Dhabi Investment Authority, Italian infrastructure fund F2i and the Italian government, has signed a deal to acquire NetCo in late 2023 for €18.8 billion.
CPP explained that the “newly defined Netco business” will consist of fixed network assets separated from TIM and will provide connectivity to homes and businesses across Italy on an open access wholesale basis through a combination of copper and fiber optics. did.
The investor group also committed to supporting the upgrade of existing networks to provide fiber-based services in urban and rural areas while retiring traditional copper technology.
However, the sale was controversial, with Vivendi, TIM’s largest shareholder, condemning the decision and subsequently launching legal proceedings against the operator.
Nevertheless, CPP added that it expects the transaction to close in mid-2024.
Dr. James Bryce, global head of infrastructure at CCP Investments, said he was optimistic that NetCo could represent the first of several infrastructure investments for the company in Italy.
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