Vivendi’s Legal Challenge to Telecom Italia’s Landline Grid Sale
On January 14, 2025, an Italian court dismissed Vivendi’s request to annul the sale of Telecom Italia’s (TIM) landline grid to KKR, an investment firm. Vivendi, a French telecom company with a 24% stake in TIM, had argued that the sale, valued at €22 billion ($22.5bn), was unlawful. The court’s decision marks a significant development in the ongoing legal battle surrounding TIM’s efforts to reduce its debt.
Why Vivendi Opposed the Sale of Telecom Italia’s Landline Grid
Vivendi’s objections to the landline grid sale stemmed from a lack of a conditional vote by TIM’s shareholders. Despite holding a substantial stake in the company, Vivendi contended that the decision to sell the grid without shareholder approval was improper. The French telecom giant is now considering its options for the future of its investment in TIM, Italy’s largest mobile carrier.
“We consider the sale of TIM’s grid unlawful,” Vivendi stated, expressing its dissatisfaction with both the decision-making process and the outcome. The company also signaled its intention to appeal the court’s ruling, keeping the legal dispute alive.
Telecom Italia Defends Its Decision to Sell the Landline Grid
Despite Vivendi’s objections, TIM maintains that its board acted within its rights. The sale of the landline grid was part of TIM’s strategy to reduce its significant debt burden. The company expects the sale to help it cut its debt by €14 billion ($14.3bn), a crucial step in stabilizing its financial position.
TIM finalized the sale in July 2024, after an agreement was reached in November 2023. The transaction involved KKR acquiring TIM’s landline network, marking a major shift in Italy’s telecom landscape.
Other Key Developments at Telecom Italia
Sparkle Unit Sale Underway
As part of its ongoing restructuring efforts, TIM has also been working to divest other non-core assets. The company recently confirmed receiving a binding offer for its subsea unit, Sparkle, from the Italian Ministry of Economy and Finance (MEF) and Retelit, a firm controlled by the Asterion fund. The bid, valued at €700 million ($717m), is expected to close by January 27, 2025.
TIM to End Premium Satellite Service in January
In another significant move, TIM has announced plans to withdraw its premium satellite service starting January 19, 2025. This service, launched in 2020, was designed to provide satellite coverage to Italy’s remote regions. However, following a dispute over pricing with Eutelsat, the company ceased offering the service in 2024 and stopped selling new subscriptions.
What’s Next for Vivendi and Telecom Italia?
Vivendi’s plans to appeal the court’s decision mean the legal battle is far from over. Meanwhile, TIM will continue its efforts to streamline its operations and address its financial challenges. With significant debt reduction on the horizon and ongoing asset sales, TIM’s future strategy is likely to involve further restructuring.
FAQ Section
Why did Vivendi oppose the sale of Telecom Italia’s grid?
Vivendi opposed the sale because it felt that TIM did not seek shareholder approval for the transaction, making the sale process unlawful in their view.
What is the value of the Telecom Italia grid sale to KKR?
The sale was valued at €22 billion ($22.5 billion), aimed at helping TIM reduce its debt.
What will happen to TIM’s debt after the sale?
TIM expects to cut its debt by €14 billion ($14.3 billion) through the sale of its landline grid.
Why is TIM selling its Sparkle subsea unit?
TIM is selling Sparkle as part of its ongoing efforts to reduce its debt and focus on core assets.
Why is TIM ending its premium satellite service?
TIM is withdrawing the service due to a pricing dispute with Eutelsat, which provided the satellite coverage.
