Olivetti is rumoured to be the target of a takeover bid by Deutsche Telekom and Enel, Italy?s state-owned electricity generator. The acquisition would buy the German telco instant presence in the $20 billion-plus Italian telecomms market.
According to German press reports, Enel would own 51 per cent of the company, with Deutsche Telekom claiming the balance. The two companies already have a relationship, with an agreement to make a joint bid for Italy?s third mobile licence.
Olivetti, which earlier this year sold its PC business to a consortium of European investors, has an 18 per cent stake in Italy?s second fixed network carrier Infostrada, as well as a controlling share of Omnitel Pronto, the country?s second cellular provider. Telecomms has been the spearhead of its recovery strategy since it broke up the company.
Ownership of Olivetti would give Deutsche Telekom, Europe?s biggest telecomms provider, its first significant presence in a non-German market. It has so far failed to make sizeable inroads into the rest of Europe, suggest analysts.
Falk Muller-Veerse, German telecomms analyst at research company Datapro, said: ?Deutsche Telekom pulled out of its bid for a share of the Spanish market through a stake in Retevision [Spain?s second carrier], but it knows it has to grow internationally. By 2002, its share of the German market will drop from 80 per cent to 61 per cent.?
Infostrada is 67 per cent owned by Global One, Deustche Telekom?s worldwide services alliance with US-based Sprint and France Telecom, so Olivetti would fit well into the picture.
However, there could be a conflict of interests within Omnitel Pronto, which is co-owned by Bell Atlantic and Mannesmann - Deutsche Telekom?s arch rival in the German telecomms market. Omnitel has proved to be a successful mobile operator, bagging two million subscribers during its short life.
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