KKR planning $37bn takeover of Telecom Italia

US fund continues stock-buyout strategy that has seen it acquire data centre operator CyrusOne with GIP for $15bn and invest in independent advisory firm Beacon Pointe in the space of days.

By João Marques Lima

Founder and Editor, The Tech Capital

3 Mins

November 22, 2021 | 6:00 AM GMT

KKR planning $37bn takeover of Telecom Italia

Salvatore Rossi, Chairman of Telecom Italia. Source: TIM

The Tech Capital

Kohlberg Kravis Roberts & Co. L.P. (KKR) (NYSE: KKR) has officially put a bid in to buy Italian telecommunications operator Telecom Italia (TIM) (BIT: TIT) in a transaction that is set to top €33.2 billion ($37.5 billion) including debt and take the group private and delisting it from the Borsa Italiana (Italian Stock Exchange).

The “non-binding and indicative” offer, which could become one of the largest private equity buyouts in Europe, was acknowledged by TIM’s Board of Directors during a meeting this Sunday, November 21.

In a statement, TIM said KKR has offered €0.505 a share in cash, representing a 45.7% premium on the company’s closing price on Friday, November 19.

The offer places TIM’s equity value at €10.8 billion. The operator also has a net debt of €22.5 billion.

The board of directors, which is under the chairmanship of Salvatore Rossi, wrote to investors: “The Indication of Interest was qualified by KKR as “friendly” and aims at obtaining approval by TIM’s directors and support by the company’s management.

“For the time being, it is conditional – among others – to an estimated four-week confirmatory due diligence, as well as clearance by key government stakeholders (TIM is subject to the Government’s special powers, so called Golden Power).”

TIM has been under pressure from markets and investors, including one of its main backers, French investment group Vivendi, following two profit warnings in the space of three months.

KKR is not new to TIM’s portfolio either, as the company owns a 37.5% stake in FiberCop, the unit holding TIM’s last-mile network connecting street cabinets to people’s homes. The deal was closed last year and valued at €1.8 billion.

KKR has been active in the digital infrastructure acquisition front, having recently partnered up with Global Infrastructure Partners (GIP) to acquire data centre operator CyrusOne Inc. (NASDAQ: CONE) for $15 billion.

The investment firm has also in the last few days signed a definitive agreement under which KKR will make an investment in Beacon Pointe Advisors, LLC. Founded in 2002, Beacon Pointe Advisors is one of the largest independent registered investment advisory (RIA) firms in the US with over $20 billion in assets under management and more than 110 financial advisors serving more than 10,000 clients in 27 offices across the country.


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João Marques Lima

Founder and Editor, The Tech Capital

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