The European Union has initiated a formal investigation into whether U.S. investment firm KKR provided incorrect or misleading information during its €22 billion acquisition of Telecom Italia's fixed-line network. This probe, announced by the European Commission, focuses on the accuracy of data submitted by KKR during the merger review process. The significant deal, which involved the integration of Telecom Italia's network assets into FiberCop, had received unconditional approval from EU regulators in May 2024.
EU antitrust regulators are specifically assessing information related to long-term agreements between FiberCop, Telecom Italia’s last-mile grid unit, and telecommunications companies Fastweb and Iliad. The European Commission stated that its prior approval was partly based on these agreements. KKR, in response, affirmed it worked with the Commission in good faith, providing "specific and accurate information," and maintained FiberCop's adherence to customer commitments and Italian regulatory authority AGCOM's economic regulations.
KKR's acquisition of Telecom Italia's fixed-line network, known as NetCo, was valued at approximately €22 billion ($26 billion) and completed in July 2024. This strategic move aimed to spin off and integrate Telecom Italia’s network infrastructure into FiberCop, an open-access wholesale telecommunications network. The Italian Ministry of Economy and Finance is also a significant co-investor in FiberCop, alongside other institutional investors.
The investigation comes amidst recent operational challenges for FiberCop, including the resignation of its CEO, Luigi Ferraris, in January 2025. Reports have also indicated a potential €449 million EBITDA shortfall for FiberCop in 2025 compared to initial projections. These developments highlight the complexities of managing such a substantial infrastructure asset and could add a layer of scrutiny to the information provided during the initial merger clearance.
The European Commission has a history of stringent enforcement regarding the accuracy of information provided during merger reviews, having previously issued fines to companies found to have supplied incorrect or misleading data. This new investigation underscores the EU's commitment to ensuring transparency and compliance from merging parties. The outcome of this probe could set a significant precedent for future large-scale acquisitions in the European market.