Telecom Italia buys AOL German unit

Telecom Italia SpA Chairman Marco Tronchetti Provera suddenly resigned on Friday after a nasty public clash with Italian Prime Minister Romano Prodi over Provera's plan to embark on a massive reorganization that would have the company heavily focusing on delivering media content over its broadband business. But it appears Telecom Italia will continue to pursue his strategy. Yesterday it announced the acquisition of AOL's broadband business in Germany for $852.7 million. AOL will provide co-branded audience services for Telecom Italia's Internet access subscribers in Germany.

Provera's plan involved splitting the fixed-line and mobile assets--with a potential sale of the mobile assets down the road. Prime Minister Prodi, however, grew alarmed that the plan would include a sale of the mobile unit, possibly to a foreign entity. But the flames ignited when Prodi disclosed details of private meetings he had with Provera over Telecom Italia's future. Prodi claimed that Provera had told him that he was pursuing a complicated equity deal with News Corp. Corporate lawyer Guido Rossi has replaced Provera.

To read more about the resignation of Telecom Italia's chairman and the acquisition of AOL's broadband business in Germany:
- take a look at this report from The Financial Times
- check out this article from The Wall Street Journal (sub. req.)
- take a look at this article from AP