The Canadian Pension Plan Investments Board (CPP) is paying €2 billion ($2.18bn) for a 17.5 percent stake in Telecom Italia's (TIM) fixed network business, which is set to be sold off and become an independent company.

Telecom Italia
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The investment puts the enterprise value of the business at €18.8bn ($20.55bn).

The Italian government approved TIM's planned sale of its fixed line network to US investment fund KKR, worth €22 billion ($23.92bn) in January. TIM agreed this deal last November, and CCP will now be part of the KKR consortium, known as NetCo.

It becomes the latest investor in NetCo, joining the likes of the Abu Dhabi Investment Authority, the Italian infrastructure fund F2i, and the Italian Ministry of Economy and Finance.

"Our investment will help deliver high-quality digital infrastructure across Italy as well as generating long-term risk-adjusted returns for the fund," said James Bryce, managing director, global head of infrastructure, of CPP Investments.

"We are optimistic that NetCo can represent the first of several infrastructure investments in Italy for CPP Investments.”

The deal is expected to close in the summer, pending regulatory approval.