AT&T, America Movil seek stake in Telecom Italia

Our Corporate Bureau
02 April 2007

New York: US telecom company AT&T and Mexican cellular services provider America Movil are in talks to buy a stake in Italy''s main telecom company Telecom Italia''s controlling company.

Telecom Italia is Europe''s fifth largest telecom group and, according to AT&T, has a market capitalisation is about €40 billion.

The two companies are keen to buy a third of Olimpia, a holding company and Telecom Italia''s main shareholder with around 18 per cent stake, for about €4.8 billion (approximately Rs27,772.8 crore).

The offers value Telecom Italia shares held by Olimpia at €2.82 each, minus Olimpia''s debt, AT&T said in a statement. A successful deal would allow AT&T to expand its international business to offset a decline in its traditional phone subscriptions.

The value would make Olimpia''s 18 per cent stake worth around 7.2 billion euro. Should AT&T and America Movil succeed in the purchase, their stakes would be worth around 2.4 billion ($3.2 billion) each.

Olimpia and Italian company Pirelli, which holds 80 per cent of Olimpia, said there would be exclusive negotiations until April 30.