Hutchison reportedly losing patience with Telecom Italia on merger talks

The prospect of an agreement between Hutchison Whampoa and Telecom Italia over a merger of their respective mobile businesses in Italy continues to diminish, according to multiple reports, as a lack of progress in the talks is starting to grate on Hong Kong-based Hutchison.

Reuters reported that, according to unnamed sources, Hutchison Whampoa is still keen to do a deal in Italy in order to boost its market position but is losing patience with the Italian operator, which has been distracted by its decision in May to spin off its fixed-line business.

Telecom Italia's board is due to meet on Thursday to discuss a possible tie-up with 3 Italia, but there is still no guarantee that any steps will be taken, sources told Reuters.

"Telecom Italia has opted for the network separation. The merger with 3 Italia has been slowed for political reasons and the Chinese's patience has a limit," one unnamed source told Reuters.

Telecom Italia directors will probably decide to halt the proposed merger at Thursday's meeting, unnamed sources told Bloomberg. Telecom Italia executives intend to focus on spinning off the company's fixed-line assets, the sources added.

The talks between Hutchison and Telecom Italia have also stalled because of disagreements over valuation, sources told Bloomberg. The report said 3 Italia has a so-called fair value of €1.5 billion ($1.95 billion), but there is a lack of clarity on how much of the operator's accumulated losses can be used to offset taxes.

The fact that Hutchison also wants to become the biggest shareholder in Telecom Italia following a merger of their mobile assets is a further sticking point for shareholders.

"Not all shareholders in Telco are convinced they should sell," sources told Reuters, referring to the Telco vehicle that controls Telecom Italia and whose biggest shareholder is Spain's Telefónica.

Hutchison at least had some success in Ireland last week, when it agreed to acquire Telefónica's O2 Ireland unit for €850 million.

For more:
- see this Bloomberg article
- see this Reuters article

Related Articles:
3 Ireland targets No. 1 spot following O2 Ireland deal
Telecom Italia's dream of Hutchison tie-up fading fast
Telecom Italia approves fixed-line network spin-off plan
Telecom Italia gives itself 30 days to decide on Hutchison tie-up
Hutchison/Telecom Italia merger plan fans flames of political opposition
Hutchison wants control in Telecom Italia merger plan, according to reports

Suggested Articles

Sprint said it will offer discounted service to customers age 55 and above.

Unlimited data plans placed a strain on carrier networks last year, but according to OpenSignal the carriers met the challenge.

Verizon plans to bring 5G to four U.S. cities this year and hopes to have standards-based equipment in place for some of those deployments.