Rai Way and EI Towers Extend Merger Talks to Create €4B TV Tower Giant
Merger Negotiations Between Rai Way and EI Towers
By Elvira Pollina and Giuseppe Fonte
Background of the Merger Talks
MILAN/ROME, June 16 (Reuters) - Shareholders in Italian broadcasting tower operators Rai Way <RWAY.MI> and EI Towers have agreed to extend talks on a potential merger after failing to reach a deal by Monday's deadline.
A tie-up between Milan-listed Rai Way, controlled by public broadcaster RAI, and rival EI Towers would create a national champion worth about €4 billion ($4.6 billion).
Ownership Structure
EI Towers is 60% owned by Italian infrastructure fund F2i, with the rest held by Italy's largest commercial broadcaster MFE-MediaForEurope, controlled by the family of late former Prime Minister Silvio Berlusconi.
Key Issues and Negotiation Points
Two sources close to the matter said the parties had been trying to narrow significant gaps on key issues ahead of the deadline.
Contract Extension Request
These include a request by RAI, which owns 65% of Rai Way, for a 15-year extension beyond 2037 of EI Towers' contract with MFE, one of the sources said. MFE has already agreed to extend the contract by five years to 2037, the sources said.
Proposed Shareholding Structure
Under the proposal being discussed, RAI would retain a 51% stake in the combined group, while MFE would hold a non-voting shareholding, the sources said.
Market Reaction and Regulatory Context
Stock Market Response
Shares in Rai Way rose 0.9% after RAI, F2i and MFE announced the extension of the talks.
Memorandum of Understanding and Legal Requirements
The negotiations stem from a memorandum of understanding signed in December 2024 by Treasury-owned RAI, F2i and MFE, and have already been extended after missing earlier end-March and end-September deadlines.
Government Decree
In 2024, Rome approved a decree requiring any cut in RAI's stake to occur through combinations with entities in the same sector, confirming an existing obligation for RAI to retain at least a 30% holding in its listed tower business.
History of Merger Efforts
Efforts to merge Rai Way and EI Towers date back more than a decade, but valuation disputes and political wrangling have repeatedly derailed a deal.
Additional Information
($1 = 0.8632 euros)
(Reporting by Elvira Pollina, Giuseppe Fonte and Cristina Carlevaro. Editing by Giulia Segreti and Mark Potter)
