TIM Participações S.A., through its subsidiary TIM Celular S.A., Thursday signed an agreement for the acquisition of AES Atimus Group (in effect 100% of Eletropaulo Telecomunicacões Ltda and AES Communications Rio de Janeiro S.A.) from Companhia Brasiliana de Energia.

The group is a telecommunications infrastructure operator in the states of San Paolo and Rio de Janeiro, the most densely populated and wealthiest regions of the country which generate 27% of national GDP.
AES Atimus is the owner of a 5,500 km fibre optic network covering all 21 towns that make up the urban conglomeration of San Paolo and Rio de Janeiro.

The group reported revenues in 2010 of 211 million reais with an EBITDA margin of 63%, and represents a vital asset enabling TIM Brasil to reinforce its competitive position. The deal has an enterprise value of 1.6 billion reais, or roughly €700 million and is expected to close by Q4 2011 once the company and the competent authorities have given their approval.

The infrastructure covered by Thurday's agreement will enable TIM Participações to reinforce development of its mobile network thanks to fibre optic connections (so-called backhauling) between transmission stations, allowing it to extend and accelerate mobile broadband services.

The company will also benefits from synergies through the internalization of AES' access infrastructure, avoiding the need to rent connections from third party operators.

AES Atimus' fibre infrastructure will integrate perfectly with that of Intelig (essentially backbone based), acquired in 2009, facilitating the rapid growth of the company's offering and selectively exploit many of the opportunities that will arise from convergence in the Brazilian market.
 
The deal will deliver possible synergies in terms of opex and capex worth 1 billion reais over three years. This is the first acquisition of this size by the Telecom Italia Group in the last years.

Today's deal will have no impact on the deleveraging plan presented to the financial community last February.
Telecom Italia offers technological infrastructures and platforms in which voice and data are converted into advanced telecommunications services - as well as the latest ICT and Media solutions. These services are constantly adapted as tools not only for the growth of the Group but for that of the country as a whole.
   
Telecom Italia, TIM, Virgilio, La7 and MTV Italia, Olivetti are the Group’s main brands, symbols familiar to consumers and a guarantee of reliability and skill.

7th July 2011