The Italian government has approved Telecom Italia's (TIM) planned sale of its fixed line network to KKR, worth €22 billion ($23.92bn).
TIM confirmed the government's approval of the deal yesterday (January 17) in a statement, under the "golden power rule".
The rule allows the government to get involved in deals that involve sectors considered strategic, such as telecommunications.
"The authorization measure, by which the Council of Ministers exercised its special powers in the form of prescriptions only, adopted the commitments presented in the course of the procedure," said TIM in a statement.
"These commitments were deemed by the Government to be fully adequate to guarantee the protection of the strategic interests connected with the assets involved in the transaction."
TIM agreed to sell its landline grid network to US investment firm KKR in November.
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.
Vivendi acquired its initial holding in TIM as part of a deal in 2014 to sell its Brazilian broadband business GVT to Telefonica SA, then an investor in Telecom Italia.
However, since then the Italian company’s shares have lost more than two-thirds of their value. Vivendi paid about €3.9bn ($4.25bn) in 2015 and 2016 for additional shares in Telecom Italia.
