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Telecom Italia Confirms Talks Underway with Hutchison 3G Italy

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Italy's Telecom Italia has confirmed that it is in talks with Hutchison Whampoa to study a possible integration with 3 Italia. The company said though that the contacts are in such immature and preliminary status that the it cannot comment any further.

The company was making the statement following a request by the local stock exchange for clarification of media reports that merger talks were taking place that could involve the two companies mobile networks.

Telecom Italia add in its statement that the board will discuss any merger proposals at a meeting scheduled for next Thursday. The merger would drive consolidation in the market and take out a player that has focused on low prices.

Hutchison Whampoa's Three network is the smallest of the country's four mobile networks with a customer base of around 9.5 million. It is estimated to be worth around USD1.9 billion. However, Telecom Italia is itself looking to cut its debt, so a merger is likely to be based on shares rather than cash.

Hutchison would then be able to cash out at a later date by selling its newly acquired shares in Telecom Italia on the open market.

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Tags: telecom italia  hutchison whampoa  Italy