French internet service provider Iliad (Free) said today it has entered into exclusive talks to acquire Telecom Italia’s broadband unit Telecom Italia France (Alice). The negotiations, which are expected to be completed before the end of the third quarter, value the enterprise at up to EUR800 million (USD1.25 billion). If finalised, Free would become the country’s second largest ISP behind France Telecom, and ahead of Numericable and neuf Cegetel. Iliad says Free has more than three million ADSL subscribers, while Alice has around 940,000 subscribers. Last month the Italian parent confirmed it had received three offers for its Alice unit in France. At the start of this year it contracted the investment bank Calyon to sell the loss-making subsidiary.