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Rome (pte029/26.05.2003/14:45) - Telecom Italia's (TI) shareholders have approved a merger between TI and Olivetti. Over 92 per cent of voting shareholders, who control 65 per cent of shares in the company, pledged their support of the merger at a recent general meeting.
According to the two companies, the merger will be carried out through an exchange of shares, in which TI shareholders will be able to exchange one TI share for seven Olivetti shares.
The main aim of the merger is to simplify TI's ownership structure. Olivetti currently holds a 55 per cent stake in TI http://www.telecomitalia.it/stampa_uk/comunicati_stampa/documento.asp?Id=34368 .
Some foreign investors have, however, protested against the measure, fearing that TI's assets would be transferred to Olivetti. They intend to take the matter to court.
TI president Tronchetti Provera has defended the move. "The merger is in all of our interests," said Provera.
TI also plans to focus on reducing its 44.8bn-euro mountain of debt. The company intends to sell its shares to the Seat Pagine Galle publishing house, which publishes Italy's yellow pages and is partly owned by Telko (56 per cent). TI also plans to sell some of its real estate and shares in Telecom Austria. The strategy is to cut TI's debts down to 43.2bn euros by 2004.
Last year TI achieved a turnover of 17bn euros and reported operating profits of 4.04bn euros - a net loss of 1.65bn euros after taxes and extraordinary expenditures.
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