Telefónica may be about to buy a chunk of Telecom Italia by crashing into the flimsy shell-owners, Olimpia. Having foresworn its telecom roots, TI now seems set to forsewear its Italian roots, too.

Reports say that Spain’s Telefónica is to bid for a 49% stake in Olimpia, which holds just under 20% of Telecom Italia In what passes for company law in Italy, this passes for a controlling stake. The transaction would be worth up to US$18bn. Hard core TI shareholders within and without Olimpia – including Pirelli and Benetton as the insiders – are reportedly poised to exit their foray into telecom operating and take the Spanish shilling.

The irony here is that Telefónica will be looking to absorb TI’s remaining LatAm assets (count them, they are meagre) and will probably seek to flush away its moribund Italian fixed-line operation. That’s just what TI itself tried to pull off last year – at which point the world collapsed around it.
Jim Chalmers