Emerging Market Rationale Underpins Intra-European Takeover

Reports of a takeover of Telecom Italia by Spain's Telefonica have confounded Italian analysts and bankers, who have made it clear that they are sceptical of the chances of a full takeover going through. Telefonica already owns a 24.5% stake in Telecom Italia through a consortium called Telco, whose other members are Italian financial groups Mediobanca, Intesa Sanpaulo and Generali. For one thing, Telecom Italia is straddled with EUR35.5bn in net debt and while it has just agreed a EUR1.25bn credit line with a consortium of banks, on the face of it, it is everything but a good deal for

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