Italy''s Tiscali buys phone and internet business of UK''s Pipex for $427 million

17 July 2007

Mumbai: Italian communications provider Tiscali SpA has agreed to acquire the telephone and internet business of British rival Pipex Communications plc, to boost its presence in the UK market.

Tiscali will pay £210 million ($427 million) for the Pipex unit, excluding its corporate DSL activities and citywide wireless network unit. Tiscali beat out rivals British Telecom plc, British Sky Broadcasting Group plc and Virgin Media Inc. in winning the Pipex bid.

Milan-based Tiscali , Italy''s No. 2 internet service provider, sold its French operations two years ago to focus on the UK, now its biggest market. Tiscali CEO Massimo Cristofori has also been in talks with Pipex as part of a strategic review, beginning March.

"The strategic review announced in March remains in progress regarding the group''s other businesses, which continue to show strong growth in all areas," Pipex CEO Peter Dubens said in a statement.

Pipex recently has been pushing its wireless internet service that spans entire cities. The company is implementing the service in London and Manchester later this year.

Pipex generated £231.7 million in sales last year, compared to Tiscali''s €678,481 ($935,519), and pretax profit of £13.9 million. Tiscali reported a pretax loss of €65.515 million last year.