Recasts, adds CEO comment, detail throughout

By Elvira Pollina

MILAN, March 23 (Reuters) - State‑controlled conglomerate Poste Italiane PST.MI has made a 10.8 billion euro ($12.5 billion) cash‑and‑share offer to bring Telecom Italia TLIT.MI, known as TIM, back into public hands, three decades after a privatisation that led to increased debt.

European Union governments are keen for tighter control over assets that handle critical data on households and companies, as they strive to create national champions capable of countering the dominance of U.S. tech giants.

Poste, which is two-thirds owned by the Italian state and operates mail, financial, energy and broadband services, last year replaced France's Vivendi VIV.PA as TIM's main shareholder, by buying 27% of its ordinary share capital.

Poste's unexpected announcement of the bid late on Sunday, sent its shares down 7% by 1140 GMT on Monday. TIM's shares rose 5%.

COMPETITIVE ADVANTAGE AND CLOSER COLLABORATION

"Controlling TIM's core digital infrastructure - made of network, cloud, edge computing - is essential to secure a competitive advantage," Poste CEO Matteo Del Fante told analysts on Monday.

He said a closer integration of the businesses would strengthen joint commercial initiatives already in place, increase cost savings, and allow Poste and TIM to sell their products to each other's clients via digital platforms.

The deal would also put Poste in control of TIM's data‑centre network and its cybersecurity unit Telsy, as well as expanding Poste's role in digital services directed at consumers, large companies and the public administration.

The conglomerate said pre-tax benefits from the deal would total 700 million euros a year, of which 500 million euros would come from cost reductions.

TIM directors will meet later on Monday to begin to assess the offer, which Poste said it expects to complete by the end of the year, with a positive impact on earnings per share from 2027.

Barclays said in a report the bid's 9% premium looked low, given also the benefits TIM might be able to get from further consolidation in the hyper-competitive Italian telecoms market.

The bid targets the TIM shares Poste does not already own, including those TIM is expected to convert into ordinary stock in May.

Given that Poste is funding its bid partly through newly issued shares, Italy's stake in Poste would fall to just above 50% if all of TIM's investors took up the offer.

The bid follows TIM addressing its debt problems - a legacy of successive leveraged buyouts that followed its privatisation - by selling in 2024 its fixed‑line network to a KKR KKR.N‑led consortium that included Italy's government.

($1 = 0.8677 euros)