Swisscom Successfully Acquires Italian ISP

by Ulrika Lomas, Tax-News.com, Brussels

23 May 2007

Swisscom, Switzerland's largest, and partially state-owned telecommunications company, has announced that its bid for Italian internet service provider Fastweb has been successful.

After the deal, worth EUR3.1 billion, Swisscom will own 82.4% of Fastnet's shares. Together with the assumed net debt of Fastweb of EUR 1.1 billion, the total transaction amounts to EUR4.2 billion or CHF6.9 billion. Swisscom plans to finance the transaction through new debt of around CHF 5.9 billion, the proceeds from the sale of Antenna Hungaria (CHF 0.5 billion), and the placement of treasury shares for an amount of up to CHF 0.5 billion.

"We are very pleased that so many shareholders have accepted our offer", stated Carsten Schloter, CEO Swisscom. "We can now start working on our vision of a successful Swiss-Italian partnership. Swisscom thanks Fastweb shareholders, the board of directors and management team as well as Fastweb employees for their cooperation and trust."

The offer period for Fastweb shares started on 10 April 2007 and ended on 15 May 2007. The settlement date of the transaction was scheduled for 22 May 2007. Swisscom will pay each shareholder having tendered its Fastweb shares an amount of EUR47 per share. In total, Fastweb shareholders tendered 64.1 million shares, equalling 80.7% of the share capital of Fastweb to Swisscom. The purchase price for the tendered shares will be EUR 3.0 billion (CHF 5.0 billion). Together with 1.4 million shares previously acquired, the ownership level (as previously stated) stands at 82.4%, and the total purchase price will be EUR3.1 billion (CHF5.1 billion).

Swisscom will now start to cooperate with Fastweb management to develop future business plans and explore forms of cooperation in more detail. Swisscom said that the transaction was a "logical step" in the implementation of its corporate strategy aimed at growing its core business and increasing company value through new activities.

Swisscom concluded by announcing that: "Fastweb's operational business will continue to be separately managed. Within the next few weeks a General Assembly will be called and new members to the Board of Directors will be proposed."

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