Italy and KKR reach Provisional Pact on TIM Spin-Off Stake

KKR made an initial agreement with the Italian finance ministry for the state to take a stake of up to 20% in a Telecom Italia fixed network spin-off. The agreement will become valid if KKR's exclusive negotiations with the operator result in a final deal.

In a brief statement, Italy’s Ministry of Economy and Finance announced the signing of a Memorandum of Understanding with the investment company, which establishes terms for a binding offer for an equity stake of up to 20%. It noted the conditions agreed to foresee a decisive role of the government in defining the strategic choices.

Telecom Italia is currently in exclusive talks with KKR over the sale of fixed network spin-off NetCo to receive a binding offer for the asset by the end of September. In its recent Q2 financial results statement, the operator indicated its activities preparing for the sale were progressing as planned. Alongside the Italian government, Reuters reported that Italy-based investment fund F2I is set to buy a stake in NetCo.