As Telecom Italia Spa shareholders prepare to vote April 16 on the company’s proposed new
corporate plan, Olivetti Spa outlined its own plans for the company should its hostile takeover bid of Telecom Italia
succeed.
According to reports from the Italian news agency Agenzia Giornalistica Italia, Olivetti’s corporate plan
for Telecom Italia would cut 13,000 jobs, about 10 percent of the company’s work force. The measure is expected to
result in $2.6 million in savings by 2002. The company also would invest $9.7 billion in Telecom Italia’s fixed-line
business and $2.8 in its mobile phone operation.
Meanwhile, AGI reported that Olivetti CEO Roberto Colaninno
said Telecom Italia’s proposed merger with its Telecom Italia Mobile cellular phone subsidiary would be of no use and
ultimately destroy TIM.
The merger with TIM is at the heart of Telecom Italia Managing Director Franco Bernabe’s
plan to thwart Olivetti’s hostile takeover bid. Shareholders are expected to vote on it and other corporate actions April
16. At least 30 percent of current Telecom Italia shareholders must approve Bernabe’s plan over Olivetti’s offer to block
the takeover.
Either way, it seems some Telecom Italia employees soon will be out of work. The Financial Times
reported the company plans to cut 40,000 jobs as part of its restructuring plan.
The entire takeover issue has gained
international attention not only because it would be the largest corporate takeover in European history, but also because
of the implications it holds for Italy’s mobile phone market.
Should TIM merge with Telecom Italia, the company
may then integrate its wireline and wireless networks in a way never seen before. One proposal calls for all voice calls
to be routed via the wireless network and leave the landline network for data transfer.
