Investment firm F2i has confirmed plans to invest €1 billion ($1.09bn) in Telecom Italia (TIM)’s NetCo, for a 10 percent stake in the newly spun-off business.

In doing so, F2i joins the Ministry of the Economy and Finance and investment firm KKR as co-investors.

In a statement, F2i said it was able to raise the funding in "an extremely short space of time."

The agreement with KKR for the entry of F2i funds into the NetCo shareholding structure guarantees governance and management rights to Italy's largest infrastructure fund.

The acquisition is expected to be finalized around mid-2024. 

“We are very pleased to participate through our funds in a project of crucial importance for the country's infrastructural progress and its digitalization," said Renato Ravanelli, CEO of F2i Sgr.

"A modern digital network, which is set to catalyze major investments in the coming years, is key to improving citizens' lives, business productivity, and Italy's competitiveness."

The Italian government approved Telecom Italia's (TIM) planned sale of its fixed line network to KKR, worth €22 billion ($23.92bn) last week.

The deal, which has been on the cards for some time, has been supported by Giorgia Meloni's Italian government since 2022, which plans to take a 20 percent stake.

TIM approved the deal without making it conditional on a vote by shareholders, with the board voting 11-3 in favor of the deal.

KKR valued the assets at €18.8bn ($20.5bn), but the overall value of the deal is as much as €22bn ($23.92bn) based on what can be earned if the grid is merged with that of small rival Open Fiber SpA.

Debt-ridden TIM expects the sale to reduce its debt by €14bn ($15.25bn).

However, the deal still faces a legal challenge from TIM's top investor, Vivendi, which has previously called the deal "unlawful."

French media group Vivendi slammed the agreement, stating that the rights of Telecom Italia's shareholders "have been trampled on," back in November.

Vivendi, which owns a 24 percent stake in TIM worth €1.3 billion ($1.4bn), is considering its future with the company.