Hutchison makes play for Telecom Italia stake

Dylan Bushell-Embling
12 Apr 2013
Daily News

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 toldReuters 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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