Italian officials defended their desire to keep Telecom Italia in Italian hands after the controlling shareholder announced it was in talks to sell a majority stake to US telecoms giant AT&T and its Mexican affiliate, an Associated Press report said.
The report said Pirelli is in exclusive talks with AT&T and its Mexican affiliate America Movil to sell two-thirds of the holding company which controls Telecom Italia. The proposal expires April 30, the Associated Press report said.
Italian government officials expressed alarm over the possible deal involving the former telecommunications state monopoly, considered a strategic asset, raising the specter of government interference following a public spat last year that led to the resignation of former Telecom chairman Marco Tronchetti Provera. Tronchetti Provera is also Pirelli's chairman, the report said.
'If the large telecommunications network will not be under the control of Italian market forces it will be a serious blow to the country,' Paolo Gentiloni, Italy's communications minister, was quoted as saying in an interview with SKY TG24 TV news channel.
He said, however, that does not mean the government will interfere.
Infrastructure Minister Antonio Di Pietro also expressed concern over the possible deal, saying the government should be ready with counter maneuvers. Industry Ministry Pierluigi Bersani told daily La Repubblica that the proposal was 'disconcerting,' the report said.
The proposal would give AT&T and America Movil, which is 8% owned by AT&T, one-third each of the Olimpia holding company, which controls 18% of Telecom Italia.Shares in both Pirelli and Telecom Italia shot up on the announcement, the report further said.