KKR charged with misleading EU regulators over Telecom Italia network deal

By Bart H. Meijer and Foo Yun Chee

Oct 19 (Reuters) - KKR was hit with EU antitrust charges on Monday, alleging it misled regulators during their review of its €22 billion acquisition of Telecom Italia's fixed-line network two years ago, exposing the US buyout group to a potentially hefty fine.

The decision by the European Commission, the EU competition enforcer, followed a year-long investigation. It approved the deal in 2024, but opened an investigation a year later following complaints by other operators.

The rivals argued that prices for them to access TIM's fixed broadband network had been unilaterally increased after the deal, even though KKR had convinced the Commission that it would not have the power to deteriorate conditions for wholesale access.

The EU antitrust watchdog said it sent a charge sheet, known as a statement of objections, to KKR for providing incorrect or misleading information about whether it would keep its existing long-term access agreements under the same terms unless mutually agreed otherwise with the third-party operators. 

KKR said it strongly disagreed with the Commission's assessment.

"We stand by the accuracy of the information provided during the Commission's 2024 review of the NetCo acquisition. We will vigorously challenge these preliminary allegations in our response to the Statement of Objections, while continuing to engage constructively with the Commission," a KKR spokesperson said.

"The Statement of Objections is not a final finding of infringement, and the Commission's existing clearance of the transaction remains valid." 

The company can defend itself at a closed hearing in the coming months before the Commission issues a final decision.

The Commission had cleared the Telecom Italia deal due in part to the long-term agreements between FiberCop, which is Telecom Italia's last-mile grid unit, and telecoms companies Fastweb and Iliad.    

Companies found guilty of misleading regulators during reviews of their deals risk fines of up to 1% of their aggregate annual worldwide turnover.

The Commission has in recent years handed out hefty fines for such violations.

($1 = 0.8919 euros)

(Reporting by Bart Meijer, Editing by Louise Heavens)