EU Objects to KKR's €22 Billion Deal
Key Facts
The European Commission has sent private equity firm KKR a statement of objections accusing it of providing incorrect or misleading information during the review of its acquisition of Telecom Italia's fixed-line network, according to Reuters. The deal at the centre of the case has a maximum value of €22 billion and involves Italian telecommunications infrastructure. The preliminary allegations concern information the company provided to regulators during the merger review, before the acquisition was cleared to proceed. Companies found to have provided misleading information in such reviews face fines of up to 1% of their total annual worldwide revenue. That ceiling is tied to the company's worldwide revenue, rather than the financial value of the transaction examined by EU regulators.
The objection centres on information provided about the terms of long-term wholesale access agreements for the fixed broadband network. According to Reuters, the case concerns whether those agreements would remain on the same terms unless the parties mutually agreed to amend them. This includes the possibility of changing the terms without securing the agreement of other operators that use the network to provide their services. Rival operators said their network access prices had been raised unilaterally after the deal, the complaint linked to the access terms under objection. The original approval of the acquisition was based in part on long-term agreements between FiberCop and telecoms companies Fastweb and Iliad. Those contractual arrangements were therefore among the factors the Commission considered when assessing the transaction.
KKR secured unconditional EU approval for the acquisition on 30 May 2024, following a review by antitrust authorities. That review focused on the market for wholesale broadband access services in Italy, according to Reuters' report on the original decision. The Commission concluded at the time that the transaction would not significantly reduce competition in the market it examined. In the market reaction to that approval, Telecom Italia shares closed up 1.5% in the same day's session. The shares had reversed earlier losses following the Commission's statement, according to the report published at the time. The opening of an investigation into whether KKR had provided incorrect or misleading information during the deal review was then announced on 24 July 2025.
The sale included a fixed-line network combining fibre optics and copper, according to a Reuters report ahead of its completion. The network covered around 89% of Italian households, reflecting the scale of the assets transferred under the deal. Telecom Italia's plan to sell the network aimed to give the company greater commercial flexibility in the domestic retail services market. It also aimed to provide opportunities to explore mergers and acquisitions and partnerships, according to the same report on the company's plans after the sale. On the network side, the investment plan announced by CPP Investments included upgrading infrastructure to provide higher-quality, higher-capacity fibre services. It also included retiring legacy copper technologies and improving information systems and efficiency.
FiberCop's ownership includes a direct Gulf investment, with the company announcing that the Abu Dhabi Investment Authority holds a 17.5% stake. The disclosure formed part of the shareholder structure announced in December 2024, following the separation from Telecom Italia. In its announcement, FiberCop described the shareholder as Abu Dhabi's sovereign wealth fund, among the investors in the separated company. CPP Investments, for its part, had announced a commitment to join the investor group by acquiring a stake in NetCo. The Canadian institution put the agreed stake at 17.5%, for an investment of up to €2.0 billion. That amount was stated as the maximum investment announced when its entry into the group was agreed.
KKR strongly rejected the Commission's assessment, affirming the accuracy of the information it provided during the acquisition review, according to its response carried by Reuters. The company said it intended to challenge the preliminary allegations in the statement of objections concerning the transaction. It stressed in its response that the statement did not constitute a final finding that it had committed an infringement in providing information. It added that "approval of the transaction remains valid," reaffirming its position on the acquisition's status following the EU objections. Over the coming months, the company can defend its position at a closed hearing before the Commission, according to the procedural process reported by Reuters. That opportunity to present its defence comes before the Commission issues its final decision in the case concerning information provided during the deal review.