Hutchison makes play for Telecom Italia stake

Dylan Bushell-Embling
telecomasia.net
Hong Kong based conglomerate Hutchison Whampoa has made an offer that would see it become Telecom Italia's largest shareholder.
 
Telecom Italia announced yesterday that its board is considering a proposal for a business combination with Hutchison Whampoa's Italian mobile unit 3 Italia.
 
The deal would likely involve a merger between Telecom Italia and 3 Italia, probably by Hutchison  selling its unit to Telecom Italia in exchange for shares in the company.
 
Hutchison has stipulated that a condition of the merger is for the company to become Telecom Italia's top shareholder.
 
Sources close to the negotiations told Reuters that Hutchison may acquire nearly 30% of Telecom Italia, by buying out some existing share holdings in addition to the stake it will receive by selling 3 Italia.

They added that Hutchison is likely to seek to acquire the additional stake from Telco, a consortium between Telefonica and several Italian companies which owns a 22.4% stake in Telecom Italia.
 
Telecom Italia has in recent years  been struggling with a large debt burden, prompting multiple writedowns and a steep decline in the company's share price.
 
A deal would require approval from antitrust regulators, as it would reduce the number of Italian mobile operators from four to three.

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