Giant Telecom Company That Once Almost Bought Apple Is Teetering On the Brink of Failure (fortune.com) 12
An anonymous reader quotes a report from Fortune: It's not a misprint. Telecom Italia SpA, Italy's beleaguered former telephone monopoly, once pitched a plan to buy Apple. About 25 years ago a group of executives from the carrier flew to California to meet Apple co-founder Steve Jobs, with an audacious plan to buy the tech company at a time it was struggling to make headway against rivals like International Business Machines Corp. Telecom Italia, on the other hand, was flying high, ranking as the world's sixth-largest telephone company by sales. Worth about $100 billion, it had minimal debt, held stakes in dozens of tech groups around the world and employed more that 120,000 people.
Although Apple's rise back from the ashes is well documented, the fate of its would-be buyer is less well known outside Italy. Today, the carrier is burdened by more than 30 billion euros in gross debt, it controls just one company outside its domestic market -- Brazil's No. 3 phone operator -- and it employs only a third as many people as it did when its executives made their pitch to Jobs. Most tellingly, Telecom Italia now finds itself in the position of needing to sell off its landline network just to get its debt pile under control. The sale would be a transformational deal and, if successful, the first such divestiture for a European carrier.
In a small twist of fate, the likely buyer is a US company, though it's not a tech giant like Apple but private equity powerhouse KKR & Co. With progress being made toward a disposal of the network, Telecom Italia's one truly valuable asset, now seems as good a time as any to ask, what happened to this once-promising company? [...] Regardless of the outcome of the network battle, the carrier won't look the same after the dust has settled. "Telecom Italia's future will now be mostly linked to its capacity of being more agile and luring new customers with more profitable services," said Laura Rovizzi, chief executive at Rome-based strategy and regulation consultant Open Gate Italia. And the carrier's service unit, basically all that would remain of Telecom Italia after a network selloff, would itself probably need to weigh a transformational deal with a tech company to guarantee its competitive footprint, she added. With so many uncertainties ahead, there's probably only one safe bet for Telecom Italia. The carrier won't be trying to buy Apple again.
Although Apple's rise back from the ashes is well documented, the fate of its would-be buyer is less well known outside Italy. Today, the carrier is burdened by more than 30 billion euros in gross debt, it controls just one company outside its domestic market -- Brazil's No. 3 phone operator -- and it employs only a third as many people as it did when its executives made their pitch to Jobs. Most tellingly, Telecom Italia now finds itself in the position of needing to sell off its landline network just to get its debt pile under control. The sale would be a transformational deal and, if successful, the first such divestiture for a European carrier.
In a small twist of fate, the likely buyer is a US company, though it's not a tech giant like Apple but private equity powerhouse KKR & Co. With progress being made toward a disposal of the network, Telecom Italia's one truly valuable asset, now seems as good a time as any to ask, what happened to this once-promising company? [...] Regardless of the outcome of the network battle, the carrier won't look the same after the dust has settled. "Telecom Italia's future will now be mostly linked to its capacity of being more agile and luring new customers with more profitable services," said Laura Rovizzi, chief executive at Rome-based strategy and regulation consultant Open Gate Italia. And the carrier's service unit, basically all that would remain of Telecom Italia after a network selloff, would itself probably need to weigh a transformational deal with a tech company to guarantee its competitive footprint, she added. With so many uncertainties ahead, there's probably only one safe bet for Telecom Italia. The carrier won't be trying to buy Apple again.
Happens a lot (Score:2)
A lot of companies "almost bought Apple" .. Microsoft .. even Sun Microsystems (remember them?) .. But then even Apple missed opportunities, for example to buy Tesla for 1000x less than what it is now.
Re: (Score:3)
A lot of companies "almost bought Apple" .. Microsoft .. even Sun Microsystems (remember them?) .. But then even Apple missed opportunities, for example to buy Tesla for 1000x less than what it is now.
That's not really the story I want to hear more about though.
What does not happen "a lot", is a mega-corp going from $100B and minimal debt to owing $30 billion, in 20 years.
The FUCK happened there? Hell, a Netflix docuseries team is standing by. Use the revenue for severance.
Re: (Score:3, Interesting)
According to their Wiki page, it was a leveraged buy-out followed bv a gutting.
Re: (Score:3)
Re: (Score:3)
Privatization through leveraged buy-out, failure to compete as a private operator in the liberalized EU telco market, and the general race to the bottom of EU telcos (too many operators fighting for scraps).
Re: (Score:2)
Privatization through leveraged buy-out, failure to compete as a private operator in the liberalized EU telco market, and the general race to the bottom of EU telcos (too many operators fighting for scraps).
Race To The Bottom.
We've heard that term so many times in business that corporate virgins now wonder who the points leader is this years Clusterfuck Championship, and how they can get tickets.
Re: Happens a lot (Score:1)
It does happen a lot more often than you think. In an open market, really large companies go bust because internal bureaucracy overhead. Companies small and large, unless they have government contracts, go out of business, get taken over, lose market share.
The reason giants like Microsoft, IBM and Boeing arenâ(TM)t bust yet is because they have massive government contracts keeping them afloat through any downturn. Had things like compatible open document standards been mandated at government levels, Mi
Whenever you see massive debt . . . (Score:4, Insightful)
In many ways, that trip to California would be the high-water mark for the phone carrier. Just a year later, the company was bought out by a group of Italian entrepreneurs led by Roberto Colaninno, now chief executive officer at Vespa maker Piaggio & C SpA, in what was Europe’s biggest-ever hostile takeover. The investors paid about 100,000 billion lire (€50 billion) for the company, with at least half the sum financed through debt.
Re: (Score:2)
And that debt was then charged on the company itself, basically Colannino bought Telecom Italia and made Telecom Italia pay for it.
I'm becoming inured to stupid headlines (Score:2)
"About 25 years ago a group of executives from the carrier flew to California to meet Apple co-founder Steve Jobs, with an audacious plan to buy the tech company at a time it was struggling to make headway against rivals like International Business Machines Corp."
This does not imply - even remotely - that they "almost bought Apple". Did Apple CEO Jobs initiate the contact? (no) Did Apple ask them to purchase the company? (no) Did they make an offer, but it was ultimately rejected by regulators? (no)
With 30 billion in red (Score:2)
it employs only a third as many people
It employs 40 000. It's not "only". Being in hopeless debt, of course, it should struggle to gather resources for own reconstruction at this point. Bad news for the creditors, unfortunately.
Nella Russia sovietica (Score:3)