(Bloomberg) -- Italy is reviewing options for gaining control of a key Telecom Italia SpA unit which manages subsea cables between Italy, the US and Israel, people familiar with the matter said.

Prime Minister Giorgia Meloni’s government is looking at how it could take control of the Telecom Italia Sparkle business as part of a bigger deal that would see the ex-monopolist sell its network business to KKR & Co., said the people, who are familiar with discussions within the premier’s office and who asked not to be named as the matter is not public. 

One option under consideration could be acquiring a controlling stake in the unit, which Meloni sees as strategic for the country, the people said. Planning for that option is still in the preliminary stages and a final decision has not been taken, the people said. The unit is valued at around €700 million ($754 million), they said.

A spokesperson for Meloni’s office declined to comment. Italy’s Finance Ministry said a decision on the matter has not been made. Representatives for Telecom Italia and KKR declined to comment.

Rome’s interest in Sparkle meshes with recent moves underscoring Meloni’s drive to carry more weight in the corporate world, including decisions to veto potential acquisitions by foreign buyers.

Telecom Italia agreed last month to sell the landline network, its most valuable asset, to KKR in a €22 billion deal backed by Meloni’s government. But the carrier’s board did not approve the US fund’s initial offer for Sparkle, and it has since said it needs more time to prepare a new bid. 

Officials in Rome are also discussing alternatives to a sale of Sparkle to KKR, the people said. The government’s interest in running the unit was also made explicit in public documents. 

Italy’s top audit court has begun a preliminary review of the state’s planned €2.5 billion investment for a stake in Telecom Italia’s network assets, including Sparkle. In a public document dated Oct. 10, the court requested clear criteria on what would allow the Finance Ministry “to get, in the future, full control of Telecom Italia Sparkle.”

Subsea Assets

Sparkle operates subsea cables that link in with countries including Israel and the US. Rome could ultimately opt to block a sale of the unit under its “Golden Power” veto provision which gives the state oversight on deals involving assets deemed to be strategic. 

The unit owns and manages a network of over 600,000 kilometers of both terrestrial and subsea fiber in Europe, the Mediterranean and the Americas, and owns subsea cables connecting Europe with Southeast Asia.

Subsea cables are among the main fiber infrastructure that allows worldwide digital data flow, potentially including sensitive information, across continents.

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