The government approved the deal under the "golden power rule", which allows it to impose specific conditions or veto transactions and investments in sectors that are deemed as strategic. These sectors include energy, telecoms and financial services.
TIM said in a statement that it has received the approval to execute the transaction it approved back in November.
TIM said the approval came after the companies made commitments which the government deemed to "be fully adequate to guarantee the protection of the strategic interests connected with the assets involved,”
This approval was granted on the basis that commitments made by TIM and KKR were “fully adequate to guarantee the protection of the strategic interests connected with the assets involved I the transaction”.
The commitments made by KKR and TIM give the Italian Government a level of oversight of the new netco.
A security task force will be established to oversee its activities, including areas related to national security and defence.
The sale is part of TIM’s strategy to reduce its debt, with the transaction potentially chalking off as much as €14 billion.
However media company Vivendi, which owns a 24% stake in TIM has slammed the deal and wants a higher price for the network assets.
It called the deal unlawful in November after it was approved by TIM’s board, and demanded a shareholder vote on the decision.
Vivendi are initiating legal action against TIM, and although it has not requested an immediate suspension of the deal, it has been reported that an initial hearing could be scheduled for April.
TIM hope to get the deal done by the summer of 2024, and while a trial might delay completion, Vivendi may also sell its stake in TIM.
Bloomberg reported in December that a sale could be on the cards, which would come as a blow to Vivendi, its initial investment of €4 billion in its 24% stake is now worth on €1.3 billion.
Vivendi initially acquired its stake in TIM that year as part of a separate broadband transaction and paid €3.9 billion for additional shares across 2015 and 2016.
Selling its stake at its current share price would lead to a massive loss for Vivendi, but considering today’s announcement and its willingness to take a stake in the network, the state is clearly in favour of getting a deal over the line.
