Italy's largest ISP looms as Enel buys Infostrada

Infostrada will be merged into Wind, Enel's joint venture with France Telecom, to create Italy's largest ISP, with 8,000 staff and 12 million customers.

Enel will pay E5.5bn (£3.3bn) in cash and the remaining 50 per cent in mortgage bonds. The bonds will be issued in two blocks, the first E2.5bn (£1.5bn) in one-year unlisted bonds and the second E3bn (£1.8bn) in three-year listed issue. The acquisition is to be financed by floating the new company in the first half of next year.

The proposed merger will deliver the majority stake of new company into the hands of Enel. The utility group currently owns 56.6 per cent of the telco, while France Telecom holds 43.4 per cent. Once the deal with Infostrada is complete, Enel will own 73.4 per cent leaving France Telecom 26.6 per cent. The French telco will be offered a chance to redress the unbalanced share division after 24 to 30 months.

Tommaso Pompei, CEO at Wind, called the deal "a perfect match". He said: "Significant strategies will be developed to allow us to optimise operating costs and capital expenditure."

The deal had foundered last week when France Telecom complained that the price tag was "excessive".