By Amy-Jo Crowley, Clare Jim and Elvira Pollina
(Reuters) -Hong Kong conglomerate CK Hutchison has been studying a potential tie-up of its Italian telecom unit Wind Tre and the Italian operations of French telecoms group Iliad, three sources familiar with the matter told Reuters.
In the latest attempt to consolidate Italy’s telecoms market, the two companies have held early-stage conversations with each other over a possible deal, the people said.
Iliad’s Italian unit could be valued at more than 3 billion euros ($3.50 billion) on a standalone basis and a deal could be structured as a joint venture, one of the people said.
Wind Tre is the third-largest mobile network operator in Italy with a 24% market share, while Iliad is fourth with nearly 11%, according to the latest data provided by Italy’s telecoms market regulator AgCom.
Iliad declined to comment, while CK Hutchison said it does not comment on market speculation. A Wind Tre spokesperson did not immediately respond to a request for comment.
The sources spoke on condition of anonymity as the talks are private.
DEAL WOULD REDUCE NUMBER OF PLAYERS
A deal would reduce the number of mobile operators in one of Europe’s most competitive telecoms markets to three from four, and as a result could face both regulatory and political scrutiny, two of the people said.
Another option could see Wind Tre acquire Iliad’s Italian operations and pay its French billionaire owner Xavier Niel with shares in the future listed entity of CK Hutchison’s European telecoms assets, said one of the two sources.
Reuters reported in March that CK Hutchison had started preparations to spin off its global telecommunications assets, a business that could be valued between 10 billion and 15 billion pounds.
(Reporting by Amy-Jo Crowley In London, Clare Jim in Hong Kong, Elvira Pollina in Milan. Additional reporting by Gianluca Lo Nostro; Editing by Anousha Sakoui, Kirsten Donovan)
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