SAN ANTONIO, April 1 /PRNewswire-FirstCall/ -- AT&T Inc. today said it is in negotiations for a potential indirect investment in Telecom Italia S.p.A. The proposal is for AT&T to purchase a one-third stake in Olimpia S.p.A., a holding company with approximately 18 percent of Telecom Italia's ordinary shares, subject to satisfactory completion of AT&T's due diligence, agreement on other terms of the transaction, and satisfaction of other conditions. As part of these negotiations, America Movil, S.A.B. de C.V. (AMX) also is considering an investment for one-third of the shares of Olimpia. AT&T's investment is contingent on America Movil's investment.
AT&T is in negotiations on the potential investment to acquire the interest from Pirelli & C S.p.A., which owns 80 percent of Olimpia. Olimpia holds only Telecom Italia assets.
The valuation of the stakes in Olimpia which are the object of the possible sale would be based on a price per Telecom Italia share equal to euro 2.82, minus the net debt of Olimpia on the closing date of the transaction, subject to the satisfaction of the terms of the proposal.
As a global telecom leader in wireless, broadband and IP networks with customers in 137 countries, AT&T is continually reviewing opportunities that will help it serve the company's growing global customer base. AT&T believes its potential investment in Olimpia would provide Telecom Italia with a strategic partner with whom it can share best practices and pursue joint interests.
AT&T has proven itself to be a capable, committed partner in its international investments, partnering with local owners and managers, and working with governments to bring the latest in telecommunications networks, products and services to consumers and businesses. Examples of this include AT&T's 17-year partnership with Telmex, whose successful collaboration has helped deliver one of the most modern telecommunications networks in North America, as well as AT&T's investment in South Africa, which resulted in a mutually beneficial relationship that helped consumers and business customers alike.
Telecom Italia is one of Europe's largest and best-run communications service providers with a market capitalization of about euro 40 billion ($53.4 billion). It has 24 million landline, 57.9 million mobile and 8.6 million broadband connections, including broadband interests in the Netherlands, France and Germany, and wireless in Brazil.
AT&T, which Forbes magazine recognized as "Company of the Year" in 2006, is an industry leader in convergence, integrating networks and applications to deliver services to the "three screens" that matter most to consumers: the TV, personal computer and wireless device. AT&T plans to invest about $18 billion in capital in 2007 to strengthen its wireless, wireline and international networks.
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