The European Commission has approved unconditionally the acquisition by Kohlberg Kravis Roberts & Co. (KKR), a U.S.-based investment group, of NetCo., which comprises the primary and backbone fixed-line network business of Telecom Italia S.p.A. (‘TIM’) as well as FiberCop S.p.A (‘FiberCop’). FiberCop is a joint venture between TIM and KKR comprising TIM’s secondary fixed-line network.
The deal, which was announced in November 2023, is valued at EUR 22 billion.
The Commission’s investigation into the impact of the acquisition found that:
- KKR would not have the ability to restrict access to passive services (i.e., infrastructure). For each wholesale product the number of available networks and wholesale providers will stay the same and the market power of NetCo will not materially increase as compared to TIM or FiberCop today. The existing long-term agreements with several access seekers, including Fastweb and Iliad, which have been entered into after the creation of FiberCop in 2021, ensure that KKR will not be able to deteriorate the conditions for wholesale access or terminate such access.
- The transaction would not increase the likelihood of coordination between NetCo and OpenFiber, given that Fastweb will continue to exert competitive pressure on NetCo and its long-standing competitor, Open Fiber. In addition, NetCo and Open Fiber will likely continue to compete, both to attract new customers and to roll-out fibre network, either in new areas or in each other’s areas.