Power utility Enel SpA said July 28 that its broadband unitEnel OpEn Fiber SpA will purchase all shares in Italianfiber-optic firm Metroweb SpA.
Under the deal, Enel and Metroweb shareholder CDP Equity SpAwill participate in a €714 million capital increase, the proceeds of which willbe used to buy all of Metroweb's share capital. Enel OpEn Fiber and Metrowebwill then be merged, with Enel and CDP Equity each owning 50% of the combinedentity. The transaction's price is based on Metroweb's assumed enterprise valueof €814 million.
Enel and CDP Equity will give Metroweb's other majorshareholder, infrastructure fund F2i, an option to acquire up to 30% of thecombined entity. F2i must exercise the option by Oct. 15, after which Enel andCDP Equity will contribute their equal stakes in the combined entity to a newcompany.
The boards of Enel, Metroweb and F2i have approved theproposed transaction, which is now subject to the approval of CDP Equity andits parent, state lender Cassa Depositi e Prestiti, in the coming days. Thedeal is expected to be completed by the end of November 2016.
Due to the agreement, Enel OpEn Fiber increased the numberof Italian cities to be covered by its fiber rollout to 250 from 224, followinga partnership struckwith VimpelCom Ltd.'sWIND TelecomunicazioniSpA and VodafoneGroup Plc unit Vodafone Italia. The revised strategic plan also aimsfor a fiber coverage of 9.5 million households, up from the previous 7.5million.
Enel OpEn Fiber aims to start installing fiber-optic cablesin the first 10 cities covered by the strategic plan in the second quarter of2017, with completion set for the first quarter of 2019.
Telecom ItaliaSpA has submitted a rival bid to acquire Metroweb, its secondattempt after a failed bid in 2015.