(Associated Press via NewsEdge) AT&T announced it is in negotiations to buy a major stake in Italy's largest telecommunications company, Telecom Italia.
The proposal, which expires at the end of April, would give AT&T one-third of Telecom Italia holding company, Olimpia S.p.A., but only if Mexican wireless company, America Movil, buys an equal-size stake. AT&T is an 8% owner of America Movil.
Pirelli & C. SpA owns 80% of Olimpia, the Telecom Italia holding company, and after posting a 2006 loss because of a writedown related to Olimpia, the board ordered the chairman to explore its sale in mid-March. Telecom Italia, a former monopoly, has struggled with declining revenue as its wireline business has shrunken.
AT&T spokesman Michael Coe could not provide a range for the size of the investment, but the company said it would be based on a price per share of 2.82 euros ($3.77), minus the net debt of Olimpia on the closing day of the transaction.
In addition to providing broadband, wireless and traditional phone service in Italy, Telecom Italia provides wireless service in Brazil and broadband service in the Netherlands, Germany and France.
San Antonio-based AT&T, which successfully acquired BellSouth at the end of 2006, has seen a considerable run-up in its stock price in the last year.
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