Telecom Italia has agreed to sell its landline business to investment firm KKR for €22 billion ($23.6 billion).
The long-awaited deal has been backed by Giorgia Meloni's Italian government.
However, approval of the deal received criticism from Vivendi, which has opposed plans to sell TIM's most valuable asset.
The deal was approved by TIM yesterday (November 5) without making it conditional on a vote by shareholders.
Instead, the board voted 11-3 in favor of the deal.
KKR valued the assets at €18.8bn ($20.2bn), but the overall value of the deal is as much as €22bn ($23.6bn) based on what can be earned if the grid is merged with that of small rival Open Fiber SpA.
Telecom Italia expects the deal to close by the summer of 2024, and will allow the company to reduce its debt by €14bn ($15bn), it said.
As for the potential sale of its submarine cable unit Sparkle, an agreement hasn't been reached as of yet, confirmed the telco, but has extended the deadline to December 5 to push for a higher offer. The company was previously valued at about €1bn ($1.07bn).
As expected, Vivendi, a French media group, and Telecom Italia's biggest shareholder with a 24 percent stake, has outlined its disapproval.
Vivendi said that the rights of Telecom Italia's shareholders "have been trampled on."
"Vivendi deeply regrets that TIM’s Board of Directors accepted KKR’s offer to buy TIM’s network without first informing and requesting a vote from its shareholders, thus contravening applicable governance rules," said Vivendi in a scathing statement.
"Vivendi’s reasoned requests, expressed through multiple communications to the Board of Directors, the Statutory Auditors, and the market regulator (Consob), aimed at protecting all shareholders and preventing such a prejudicial situation, have been completely ignored. TIM’s Board of Directors has thus deprived each shareholder of the right to express their opinion in the Shareholders’ meeting, as well as the related right of withdrawal for dissenting shareholders."
It had been widely reported last month that Vivendi would challenge in court any decision made by the Italian telco's board to sell its landline grid unless shareholders back the sale by a qualified majority.
TIM has been trying to spin off its grid assets since 2021, while US investment fund KKR has held a long-term interest in the assets.
The Brothers of Italy party, which is led by Prime Minister Meloni, has been interested in taking the debt-ridden operator under its control for some time, even before it won the election last year.
Earlier this year, KKR submitted a non-binding offer to buy Telecom Italia's (TIM) fixed network assets, with the bid valuing these assets at €20 billion ($21.16bn).
Another offer was reportedly submitted in June by KKR, this time in the region of €23 billion ($24.34bn), which prompted the two parties to open negotiations.
Telecom Italia sees its network grid assets as key to easing its net debt, which currently sits at €26 billion ($27.5bn).
