Telecom Italia receives €10.8bn takeover bid

• Poste Italiane, is already the largest single shareholder in Telecom Italia 
• Now Italy’s state-owned postal service has launched a takeover bid for the 73% of Telecom Italia’s shares it doesn’t already own
• The move values Italy’s national telco at €10.8bn
• Poste Italiane believes such a deal can create a national “hub of infrastructural and technological security” that can meet Italy’s sovereign services needs

In what might seem like a retrograde move, Italy’s state-owned postal service Poste Italiane has launched a takeover bid for Telecom Italia (TIM) that values the country’s national telco at €10.8bn. If successful, the acquisition would take Italy’s national operator back under state control, 30 years after it was privatised. 

Poste Italiane is already the largest single shareholder in Telecom Italia, having acquired a 15% stake from French media giant Vivendi in September last year and then buying yet more shares from Vivendi in December to take its current holding to 27.32%. 

Now Poste Italiane, which has been developing a broader range of digital, financial and utility services in recent years, has decided to launch a voluntary public tender offer for the 75.19% of Telecom Italia it doesn’t already own, it announced on 22 March (in Italian). It is offering Telecom Italia shareholders €0.635 for each share (of which €0.167 would be cash and the rest in newly issued shares), which is a 9% premium compared with Telecom Italia’s closing share price on 20 March. 

The news sent Telecom Italia’s share price up in Monday morning trading on the Milan stock exchange by 6% to €0.61, short of the Poste Italiane offer, suggesting that investors aren’t supportive of what appears to be a low-ball offer.   

Poste Italiane aims to create a single company that would “represent the country’s largest connected infrastructure platform, a true engine of innovation, a hub of infrastructural and technological security [and] a strategic pillar of the national economy” that would enable “the country’s digital transformation” and the convergence of “networks, cloud, edge computing, data and digital identity”. The resulting merged operation would be “active in the provision of essential services for Italians – a leader in the financial and insurance sectors, logistics, telecommunications and digital services.”

The combined group would (based on 2025 figures) have aggregate annual revenues of approximately €26.9bn, earnings before interest and taxes (EBIT) of approximately €4.8bn and more than 150,000 employees. Poste Italiane has identified potential cost savings of €500m if the merger is completed.

Poste Italiane added: “The significant operational scale, combined with the widespread distribution network and the solidity of the relationship with Italian families, businesses and the public administration, represents a distinctive element capable of supporting growth and strengthening commercial effectiveness in the relevant markets, through value creation that transcends the boundaries between traditional sectors by implementing the convergence between the physical and digital worlds. The transaction, proposed to the market, aims to scale and enhance the Poste Italiane platform by adding three significant assets: A nationwide fixed and mobile network, a leading position in the country’s cloud and datacentre infrastructure, and the ability to offer secure and sovereign connectivity to all stakeholders.”

Key to that proposition is TIM Enterprise, the domestic business-to-business (B2B) division of Telecom Italia, which outlined its sovereign services strategy last October, shortly before, according to reports in the Italian media, it struck a plan with Poste Italiane to create a joint digital services hub for the B2B sector.  

It’s worth noting, though, that while Telecom Italia still owns and runs its own mobile access network and still has a broad range of digital enterprise service offerings, it sold its fixed access network business, NetCo, in 2024 to a consortium led by private equity firm KKR in a deal valued at up to €22bn, though of course it still has access to and uses that fixed access infrastructure. 

Telecom Italia’s board recently approved its full year 2025 financial report. The telco, which has operations in Italy and Brazil, reported a 2.7% year-on-year increase in organic (like-for-like) group revenues to €13.7bn and a 6.5% increase in group EBITDA (after lease costs) of almost €3.7bn, while the operator’s group net debt was cut to €6.85bn from €7.27bn at the end of 2024. 

The operator ended 2025 with 6.9 million fixed line customers in Italy (of which 5.56 million were high-speed broadband connections), while its domestic mobile customer base shrunk to 15.2 million from almost 16 million at the end of 2024. 

TIM Brasil ended last year with 62 million mobile customers, roughly the same as at the end of 2024, and 850,000 fibre broadband customers.

The operator had previously issued targets for 2026 of a 2% to 3% increase in group revenues and a 5% to 6% increase in group EBITDA (after lease costs), with capital expenditure levels at below 14% of revenues, so the Telecom Italia management is certainly confident it is on a strong growth path – that’s one reason why Poste Italiane’s offer might appear to be too low. 

- Ray Le Maistre, Editorial Director, TelecomTV