Milan (Reuters) – Italy suspended the projects of the private CVC investment fund and the French telecommunications operator Iliad aimed at buying Telecom Italia (TIM) and consolidating the national telecommunications sector, told Reuters three Sources close to the file.

The financial post ITALIANE financial conglomerate, supported by the State, is preparing to invest in Telecom Italia (TIM), by buying the participation of 9.8% owned by the CDP public bank, the sources said. An announcement is expected during the weekend.

This operation could allow Italiane post, which does not have its own network, to play a role in the future consolidation of TIM. Italiane and Tim post have declined any comments.

After having sold its network of land lines last year to a consortium led by KKR as part of a debt reduction plan supported by the government, TIM, whose size has been reduced, aroused the interest of CVC and its rival Iliad.

However, in recent weeks, these two companies have encountered the reluctance of the Italian government when they asked for an official green light, according to sources.

CVC aimed at the participation of 24% of TIM that the French media group Vivendi plans to sell, while he seeks to merge his Italian activities with those of Tim, had reported Reuters at the beginning of the month.

CVC was close to an agreement with Vivendi to replace it as the main investor of TIM, but he did not obtain the prior approval of the government, said a source. Vivendi refused to comment.

Iliad also did not obtain the government’s support at this stage, key members of the administration having marked their reluctance to support an agreement that would place a foreign investor in TIM orders, sources said. Iliad refused to comment.

Italy considers Tim as a strategic company and any transaction involving its assets must be approved by the government.

(Report Elvira Pollina and Giuseppe Fonte, Elena Smirnova, edited by Sophie Louet)

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