Italian insurer Assicurazioni Generali will exit Telecom Italia’s (TI’s) largest shareholder, holding company Telco, ahead of schedule, paving the way for Telefonica to become the Italian incumbent’s largest direct shareholder.
The Generali board…
Italian insurer Assicurazioni Generali will exit Telecom Italia’s (TI’s) largest shareholder, holding company Telco, ahead of schedule, paving the way for Telefonica to become the Italian incumbent’s largest direct shareholder.
The Generali board decided to exercise its right to withdraw from the agreement with co-shareholders Telefonica and Italian banks Mediobanca and Intesa Sanpaolo, according to a company statement.
The group CEO, Mario Greco, will now determine the procedure for the exit. Generali said it will remain subject to the terms of the agreement until 28 February 2015 unless a demerger is finalised earlier.
“The exit from Telco is in line with the group’s strategy, aimed at actively administering its assets and it will streamline the management of the investment itself,” Generali stated.
Formed in 2007, Telco has a 22.4% stake in TI. Spain’s Telefonica is Telco’s largest shareholder with a 66% stake, Generali has a 19.3% stake and the two banks each have 7.34% holdings. Last September, Telco members signed an agreement that will see Telefonica gradually increase its influence over TI as the Italian organisations unwind their interests. Once implemented, Telefonica will hold a 15% direct stake in TI.
The two banks in Telco have indicated that they too intend to exit their investments this June, meaning Telco is likely to be dissolved. Intesa Sanpaolo CEO Carlo Messina said last week that the bank would reveal its plans to exit Telco within “the coming weeks”.
An increase in Telefonica’s interest in TI could reignite regulatory issues to do with the two telco’s operations in Brazil, Vivo and TIM Brasil. Earlier this month, Brazilian antitrust regulator Cade upheld an earlier decision to fine Telefonica R$15m (US$6.6m) and order it to reduce its influence in the local mobile market. Telefonica is preparing to ask the courts to overturn the ruling. The Spanish telco has argued that it does not vote on matters at TI that affect TIM and also removed its two representatives on the Italian telco’s board.
Meanwhile, Egyptian businessman Naguib Sawiris has said he would be prepared to invest US$1bn-US$2bn in TI if Telefonica exits its investment. The TI board has previously turned down approaches from both Sawiris and Hong Kong-based Hutchison Whampoa.
