(Bloomberg) -- KKR & Co. signed a memorandum of understanding with Italy’s Finance Ministry in its €23 billion ($25.3 billion) bid for Telecom Italia SpA’s network, as Rome pushes to retain some oversight over an asset it deems strategic.
The US private equity firm signed a preliminary agreement which could give the Treasury as much as 20% in the former phone monopoly’s grid unit, according to a ministry statement.
The terms of the offer “foresee a decisive role of the government in defining the strategic choices,” the Economy Ministry said.
Telecom Italia in June kicked off exclusive talks with KKR on the sale of the network in a bid to slash debt. The US firm valued the network, or grid, at as much as €23 billion including some earn-outs, people familiar with the matter said at the time.
READ MORE: KKR Close to Involving Italy in Telecom Italia Network Deal
Prime Minister Giorgia Meloni has signaled that she considers Telecom Italia’s network a strategic asset that must retain a degree of public oversight. Italy’s government has the right to veto deals involving strategic assets, and Rome’s desire to safeguard the company’s 40,000 employees means that any offer without state backing would face significant hurdles.
©2023 Bloomberg L.P.
