Most Australians don't have enough fiber in their diet.

Not Macquarie, though, which is about to acquire a stake of between 40% and 50% of Italy's fast wholesale broadband operator Open Fiber from Italian energy giant Enel.

Enel's board met in Rome yesterday and approved the sale, afterward issuing a statement saying their side expected the deal to be completed by the end of June 2021.

Figure 1: Fiber rich: Australian investment bank Macquarie is about to snap up a large stake in Italy's Open Fiber. (Source: Denny Müller on Unsplash

If the Sydney-based investment bank and financial services company buys a 50% stake, this is worth €2.65 billion.

Italy's government has long been keen to create a single national broadband operator which is open to all operators, by mashing together Open Fiber's fast-fiber infrastructure with Telecom Italia's landline grid.

The Turin-based Italian investment bank Cassa Depositi e Prestiti (CDP) holds the remaining stake, and has right of refusal to any of Enel's 50% that Macquarie does not buy.

Rome, for its part, would like to see CDP gain a majority stake. It wants the national broadband operator to be independent of Telecom Italia.

Aussie what you did there

Macquarie, in a conciliatory move, has offered in any event to let CDP pick the chairman and chief executive. The Australian investment bank is exploring syndicating its stake to private investors.

Enel's chief executive, Francesco Strace, told reporters in November the time was right for his company exit: "probably, it is good for us to exit Open Fiber now," he said.

Mr Strace said his company may try to transfer its experience with Open Fiber to the Latin American broadband operator Ufinet, where it has a 21% stake and options to acquire more shares. But he clearly gets on with the Australians. Macquarie, he says "is one of the potential partners in Ufinet."

Open Fiber gets on slightly less well with Telecom Italia. They're fighting a protracted €1.5 billion court battle, with Open Fiber accusing Telecom Italia of anti-competitive behavior in the broadband market.

If Open Fiber is lucky and wins, then Enel will get to pocket 75% of any damages, under one of the deals two extra "earn out" clauses.

The second one says if Macquarie Infrastructure and Real Assets (MIRA) transfers some of its Open Fiber holding into the joint venture FiberCop, as it's expected to do, Enel will snaffle up an extra €500 million.

Enel is Italy's former National Board for Electricity: the company's name stands for Ente nazionale per l'energia elettrica. It was privatized in 1999, but Italy's Ministry of Economy and Finance remains its largest shareholder with a 23.6% stake. It trades on the Milan Stock Exchange.

Better call the FiberCops

FiberCop is in center court for Italy's plans to create a wholesale, nationwide fast broadband network.

It's a joint venture which holds Telecom Italia's fixed network's assets, alongside those of Flash Fiber, itself a joint venture between Telecom Italia and a smaller operator Fastweb.

The Italian government's ultimate plan is to mash FiberCop together with Open Fiber, and call the resulting telco AccessCo.

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Enel's agreement with Macquarie is an important bystation on the road to AccessCo. Another big one came in late November, when the European Commission said that FiberCop as a joint venture didn't require regulatory scrutiny.

The interesting thing to watch out for next is whether the FiberCop-Open Fiber mashup will, however, constitute a merger in Brussels' eyes.

If Telecom Italia ends up firmly out of the way, though, European eyes will be smiling.

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— Pádraig Belton, contributing editor special to Light Reading