EC Accuses KKR of Misleading Brussels Over TIM NetCo Deal

The European Commission has issued a Statement of Objections accusing KKR of submitting incorrect or misleading information during its 2024 review of the buyout of Telecom Italia's (TIM) fixed network assets.

The preliminary finding centres on answers the US investment company gave about wholesale access agreements attached to NetCo, the unit housing TIM's fixed network and the FiberCop wholesale operation. Regulators say those answers mattered to whether the deal got cleared at all.

The Commission opened the probe after complaints from operators. Following its investigation, it holds the preliminary view that KKR "at least negligently, submitted incorrect and/or misleading information on the terms of its existing long-term agreements."

What exactly does the EC allege?

The accusation turns on one specific claim: that terms in existing contracts would carry over after the acquisition, because they could only be changed with the agreement of third-party operators.

That assurance, the EC believed at the time, would mean "KKR will not be able to deteriorate the conditions for wholesale access or terminate such access." The regulator states information on this point was key to its assessment of the proposed transaction.

Then came the complaints. After the buyout closed, third-party operators told the Commission that FiberCop, the wholesale provider, had increased prices.

EC EVP for clean, just and competitive transition Teresa Ribera said: "Effective merger control depends on companies providing the commission with correct information."

She continued: "KKR appears to have provided incorrect or misleading information about whether it would keep its existing long-term access agreements under the same terms unless mutually agreed otherwise with the third-party operators. Our evidence suggests that, after the merger, KKR may have raised prices for existing wholesale broadband customers, in some cases significantly."

How has KKR responded?

A KKR spokesperson told Mobile World Live the company "strongly disagrees with the European Commission's preliminary assessment. We stand by the accuracy of the information provided during the commission's 2024 review."

The spokesperson added: "We will vigorously challenge these preliminary allegations in our response to the Statement of Objections, while continuing to engage constructively with the commission. The Statement of Objections is not a final finding of infringement, and the commission's existing clearance of the transaction remains valid."

That last point is worth dwelling on. A Statement of Objections is a formal step in an EC investigation, not a verdict. It gives the accused company a chance to reply before any final decision.

What happens next?

KKR now gets to respond to the allegations in writing. The Commission's clearance of the original transaction stands for now, but the process could end in a fine if Brussels ultimately finds the company supplied false information during merger review.

For an investor-led deal that Brussels waved through in 2024 on the strength of wholesale commitments, the discovery that those commitments may not have held is an awkward turn. The reply, and the Commission's patience, will decide how awkward.