Shareholder calls for Telefonica tie-up

14 Apr 2008

A minority shareholder in Telecom Italia is calling for the company to be merged with its Spanish counterpart Telefonica in order to boost its international presence. The Fossati family has built up a 4.45% stake in Italy’s dominant telco and is now pushing to have two seats on the 15-person board, putting more pressure on under-fire CEO, Franco Bernabe. Bernabe wants to improve profitability by cutting costs, reducing debt and boosting Telecom Italia’s operations in Brazil and Germany. But Reuters reports that Bernabe’s cautious tactics have been criticised by analysts, who claim the approach will see the Italian telco become a strong domestic player but with little influence overseas. The Fossati family wants Telecom Italia to merge with Telefonica by 2011; Telefonica has a wider international presence than Telecom Italia and already owns an indirect stake of 10% in the Italian telco.

Italy, Telecom Italia (TIM), Telefonica