PRIVATE equity giant KKR looks set to abandon its pursuit of Telecom Italia after a monthslong effort.

Telecom Italia has signed an arrangement with the Italian state lender CDP which will see it attempt to combine the phone group's network with a smaller broadband rival, according to Reuters.

KKR is expected to say in a letter today that Telecom Italia's failure to offer it the chance to due diligence, which it says it has been requesting for months, means that no further bid would be forthcoming. KKR had offered around £9.8bn for the telecom group.

Reuters reported last night that Rome is keen to merge Telecom Italia's assets with that of smaller rival Open Fiber to avoid costly duplication of investment amidst a nationwide digital infrastructure upgrade.

Telecom Italia has a crucial board meeting at the end of this week.

(c) 2022 City A.M., source Newspaper