The new company starts out with a capital structure of 5,145 million euro,representing a 2,314 mi... Consortium Buys TI Stake..
The new company starts out with a capital structure of 5,145 million euro,representing a 2,314 million euro investment for Telefónica. An additional capital increaseof 900 million euro is foreseen in which Telefónica will have the right to subscribe for newshares on a pro-rata basis, in accordance with its current participation.
The agreement enables Telefónica to enter Telecom Italia's Board with twomembers, a number proportionate to its 10% economic interest in the company. In thenew company, Telefónica will have the right of first refusal on the sale of shares, as well asveto rights in certain decisions related to share ownership changes, dividend policy anddivestitures.
This operation enables Telefónica to both strengthen its relationship with TelecomItalia, with whom it has entered into cooperation agreements in Germany, and toreinforce its position in Europe and Latin America. Nonetheless, the two companies(Telefónica and Telecom Italia) will be managed separately and independently and it isforeseen that both Telefónica and the board members it appoints will abstain fromparticipating and voting in meetings of the relevant corporate bodies whose purpose is toconsider business decisions related to countries in which both companies have a presence.
As a result of meetings with the Italian operator, Telefónica and Telecom Italiaforesee the generation of synergies which would give rise to costs savings for bothcompanies.
This investment in no way alters Telefónica's commitment to the markets withrespect to limiting its financial investments this year to a net total of 1,500 million euro.
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