Telefonica SA agreed to boost its stake in Telecom Italia SpA in an 861 million-euro ($1.2 billion) cash and stock transaction, expanding its influence over the indebted Italian phone company and paving the way for potential asset sales.
The Spanish carrier will pay an initial 324 million euros to increase its holding in Telco SpA, the investment vehicle that owns 22.4 percent of Telecom Italia, to 66 percent from 46 percent. Partners Assicurazioni Generali SpA, Intesa Sanpaolo SpA and Mediobanca SpA will gradually reduce their stakes. The price values Telecom Italia shares at 1.09 euros each. The stock rose as much as 4.9 percent to 61.9 cents in Milan today.