2023.03.06 ISM Roundup

Written by
Gabriella Couloubaritsis
March 6, 2023

Competing Offers for Telecom Italia

Sources: Reuters, AFR, Yahoo 

Two groups of investors are competing for the landline network and submarine cable unit of Telecom Italia (TIM), Italy’s most important telecommunications infrastructure firm which employs 40,000 people. TIM's top two shareholders include the Italian state lender Cassa Depositi e Prestiti (CDP) and France’s Vivendi. Vivendi has set a €31 billion price tag for selling the grid. Under Italian rules, Rome has the power to block unwanted interest for assets of strategic importance such as TIM's grid.  

Last month, U.S. investment firm KKR submitted a non-binding offer for a controlling stake in TIM, valuing TIM's grid at around €20 billion including debt. KKR currently owns a minority stake in Telecom Italia’s FiberCop unit. In 2021, TIM rejected an offer from the U.S. firm to purchase the full business for €10.8 billion. 

CDP is expected to present a counter offer after receiving government approval to partner with Australian infrastructure fund Macquarie. The CDP-Macquarie team says their offer meshes with the Italian government’s goal of building a single national network through a merger of Telecom Italia and Open Fiber. 

FIRB Declines Foreign Investor's Increased Ownership Request 

Sources: Mining, SCMP 

On the grounds of national interest, FIRB has prevented the largest shareholder of Australian rare earths producer Northern Minerals from increasing its ownership from 9.92% to 19.9%. China’s Yuxiao Fund submitted the request to FIRB in August 2022. Northern Minerals has been focused on fine-tuning its heavy rare earths processing system through a pilot plant, which could make the Western Australia-based miner one world’s first significant heavy rare earth producer outside of China. The company’s flagship project, Browns Range, is slated to become Australia’s only heavy rare earth mine and the first relevant dysprosium producer outside of China. Singapore-registered Yuxiao Fund is an investment vehicle of Chinese national Yuxiao Wu, who also owns mines in Mozambique supplying lower-grade rare earths to China. 

China Sanctions Lockheed Martin and Raytheon  

Sources: Axios, Baker McKenzie, 2023.02.13 ISM Roundup 

This past week, China added Lockheed Martin and Raytheon's Missiles and Defense subsidiary to the country’s unreliable entities list for supplying arms to entitites in Taiwan. Both companies are prohibited from engaging in import and export activities in China or making new investments in the country. The firms will be fined twice the contract value of their arms sales to Taiwan since the list first came into effect. The firms’  senior managers will have their work and residence permits canceled and be barred from entering the country. China's "unreliable entity" list is a mechanism announced by China's Ministry of Commerce in 2019 with implementation guidelines released in 2020. The Biden administration recently blacklisted six Chinese government-backed groups with links to the balloon program by adding them to the Commerce Department’s entities list, which prevents companies from receiving American parts and technologies without a special license.