KKR faces potential 1% fine over EU objections to Telecom Italia deal
Key Facts
The European Commission has sent investment firm KKR a statement of objections setting out a preliminary finding that it may have provided misleading or inaccurate information during the review of its acquisition of Telecom Italia's fixed-line network. According to Reuters, a fine for providing misleading information during a merger review, if established, could reach 1% of the company's total annual worldwide turnover. That ceiling is linked to the company's global turnover, while the objection concerns information submitted to obtain regulatory approval for the acquisition. The case centres on assurances concerning other operators' access terms to the network and the continuation of their long-term agreements. KKR said the statement of objections does not constitute a final finding of an infringement and that the existing acquisition approval remains valid.
The investigation followed complaints from rival operators about access prices for the fixed broadband network after its change of ownership, Reuters reported. Those operators said prices had been increased "unilaterally", the core of their objection to how infrastructure access terms were applied after the acquisition. The Commission opened the formal investigation on 24 July 2025 after receiving their complaints, according to Investing.com. The case concerning information submitted during the deal review thus progressed to a formal investigation and then to a statement of objections setting out the Commission's preliminary assessment. The rivals' complaints link the price changes they faced after the acquisition to the assurances provided during the regulatory review preceding its approval.
The original EU approval was based in part on long-term agreements between FiberCop and both Fastweb and Iliad, according to Reuters. Those agreements formed part of the basis for the Commission's assessment of other operators' access to the network during its review of the acquisition. ANSA reported that the objection concerns assurances that the terms of long-term access agreements would remain in place and that amendments would require mutual agreement. According to the agency, the terms "could only be amended by mutual agreement with the other operators". That condition places the consent of the contracting parties at the heart of the case, which concerns representations made to the Commission about the process for amending the agreements underpinning the approval.
KKR strongly rejected the European Commission's assessment, according to Reuters, responding to objections concerning information it provided during the acquisition review. The company said, according to ANSA, that the statement of objections "does not constitute a final finding of an infringement". It also maintained that EU approval of the deal remains valid as the investigation reached the stage of presenting preliminary findings to the company. The Commission, meanwhile, has the power to revoke acquisition approvals in cases involving fraudulent information, according to Europa Press. That power concerns the decision to allow the acquisition itself, while the company's stated position remains that the existing approval is valid and that it disputes the assessment contained in the statement of objections.
The infrastructure concerned includes a fibre-optic network whose fibre-to-the-home coverage reached 12.2 million premises across Italy during 2024, FiberCop said. In its annual results, the company said that coverage had increased by 2 million premises compared with 2023 and that it had met management's annual fibre rollout target. As for the deal's historical market reaction, the original EU approval was followed by gains in Telecom Italia shares, according to Reuters. The stock closed the session in which that approval was announced up 1.5%, having turned higher and reversed earlier losses after the Commission's statement. That move occurred during the session marking the original approval of the fixed-line network acquisition, before the investigation into information submitted during the regulatory review.
At the next stage, KKR can defend its position before the Commission at a closed hearing in the coming months, according to Reuters. This step allows the company to present its defence against the objections before a final decision in the case concerning the acquisition review. The company's response to the statement of objections will form part of the procedural process preceding the Commission's decision on whether to pursue the case, according to Europa Press. There is no predetermined deadline for that decision after the response is received, the agency said. This process follows the formal investigation opened on 24 July 2025, with a potential hearing in the coming months remaining the next available step for the company to present its position.