Swisscom’s Italian bid is a success
Switzerland's biggest telecommunications specialist, Swisscom, has succeeded in its takeover bid for Italian broadband operator Fastweb.
The former state monopoly will own 82.1 per cent of the Italian company at a cost of €3.1 billion (SFr5.12 billion), and take on another €1.1 billion in debt.
The Milan stock exchange announced the result on Tuesday, the last day of Swisscom’s bid. On Monday, the Swiss operator still controlled less than half of Fastweb’s shares.
“We are very pleased that so many shareholders have accepted our offer,” said Swisscom CEO Carsten Schloter in a statement. “We can now start working on our vision of a successful Swiss-Italian partnership.”
The Swiss company held 1.74 per cent of Fastweb at the end of March. It launched an offer of €47 per share on April 10, and needed more than half the broadband operator’s stock to be successful.
Swisscom’s bid received a welcome boost when Fastweb’s founder Silvio Scaglia agreed to sell his 18.7 per cent shareholding. On Tuesday, another 28.945 million shares were sold to the Swiss, who now hold 64.141 million.
There was no competition for the bid, which might have forced the price upwards. The Swiss competition commission has already approved the deal, and the European Commission gave the go-ahead last Thursday.
Technological leader
Fastweb is Italy’s second biggest telephone operator behind Telecom Italia, with a 13 per cent market share. It is the leading provider of internet protocol (IP) services, and has over one million customers.
Despite the fact the Italian firm is carrying considerable debt, Swisscom does not plan to make major changes at its new subsidiary. Fastweb will remain independent and the 3,200 employees should keep their jobs, Schloter has said previously.
The Italian company has impressed observers with its investment in profitable sectors such as IP technology and the rapid expansion of its customer base, even though it posted a loss last year.
Analysts believed Swisscom’s bid made good business sense, saying it would help compensate for a decline in fixed-line revenues by gaining exposure in growing markets.
Swisscom was particularly interested in Fastweb’s technological know-how, and reckons its new Italian partner is three to five years ahead in some domains.
Fastweb has for example been offering television via internet since 2001, whereas Swisscom’s Bluewin subsidiary has only been proposing the service for a few months.
With the total cost approaching SFr6.9 billion, Swisscom plans to finance the transaction with new debt of SFr5.9 billion, the proceeds from last week’s sale of Antenna Hungaria worth SFr540 million and the sale of treasury shares worth another SFr500 million.
swissinfo with agencies
Fastweb was founded in 1999 as an alternative broadband provider for the city of Milan.
The company was the world’s first provider of integrated voice, data and video services based on internet protocol.
Fastweb 2006 results:
Revenue last year was €1.26 billion
Consolidated net loss: €123.6 million compared with €124.8 million in 2005.
EBIT: €87.5 million compared with €107.4 million in 2005.
Broadband subscribers: 1,062,400 (+49%).
Assets include a 22,000-kilometre fibre-optic network built at a cost of €3 billion.
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