News

Telefonica CEO Cesar Alierta may take over Telecom Italia to boost the company's growth in Europe.



Telecom Italia would bring €28 billion in additional revenue and a larger presence in Europe and Latin America.



Telefonica already owns a substantial stake in Telecom Italia and has a potential ally in Marco Fossati, another large shareholder.



This merger would continue the consolidation trend in European telecom operations and would also provide greater economies of scale for Telefonica in Latin America, where it currently competes with Telecom Italia, as well as Carlos Slim's Carso Grupo companies.



The deal is likely to be complicated, not least by the Italian government's opposition to a foreign takeover. One of Telefonica's key competitors, 3 Italia (part of the Hutchinson Whampoa group), alleged this week in the Italian parliament that the Spanish company was blocking the development of new generation networks in Italy.



Telecom Italia has more than 70,000 workers, and is one of the biggest employers in Italy. This merger could mean increased protection for the rights of those workrers, who would be covered by UNI and Telefonica's global agreement.