Pirelli shake up merges Olivetti, Telecom Italia

After months of talk, Marco Tronchetti Provera, president of the Pirelli Group, which controls Telecom Italia, Italy’s ex-monopolist telecom operator, has disclosed a promised restructuring plan, which is not meant to overcome financial or business difficulties, but to simplify the control chain.

Currently, the so-called “Pirellina” controls Pirelli, which controls Olimpia, which controls Olivetti, which controls Telecom Italia, a complexity that has been criticized by market operators and the group’s stakeholders. Besides reorganizing that structure, another goal is to dispose of noncore companies and assets.

After the reorganization takes place, a “new” Pirelli will control the group’s main interests, among which is Olimpia, which will continue to control Telecom Italia. The “new” Telecom Italia (the Olivetti name will disappear) will control, among others, Telecom Italia Mobile, one of Europe’s most important mobile communications operators, and Seat, a company that tried to emulate AOL Time Warner Inc.’s connectivity-and-content business model. Seat will be split into two companies, with one being sold (the directory business), and one being kept in the group (the Internet service provider, Web content and television business).

The full article, in Italian, is available at http://www.cwi.it/ncwi/news.nsf/MainInFrame/3561D97564D84E5DC1256CE7004F9756?OpenDocument