By Giada Zampano
OF DOW JONES NEWSWIRES
ROME -(Dow Jones)- Telecom Italia SpA (TI) said Thursday it reached a preliminary agreement to sell its German broadband unit Hansenet to Telefonica SA (TEF) for EUR900 million, as part of its efforts to focus on core assets and reduce its heavy debt burden.
Italy's largest telecommunication operator said the Hansenet sale will accelerate the reduction of its closely watched net debt, which stood at EUR35.5 billion at end-September.
Analysts had valued Hansenet at around EUR980 million.
Hansenet will give Spain's Telefonica, a key Telecom Italia shareholder, an influx of 2.3 million broadband customers, bulking up its high speed Internet offer in the highly-competitive German telecoms market.
Telecom Italia said its reported third-quarter net profit, including Hansenet operations, grew to EUR741 million in the third quarter from EUR626 million a year earlier.
The Italian operator, which has focused on reducing its debt and slashing costs, confirmed its profitability targets for the full year.
The sale of Hansenet is part of Telecom Italia's plan to shed non-core assets for up to EUR3 billion. The assets earmarked for sale also included international cable unit Sparkle and Cuban unit Etecsa.
Telecom Italia shares were briefly suspended limit up after the Hansenet announcement, and by 1510 GMT were trading up 3.6% at EUR1.16.
Company Web site: www.telecomitalia.com
-By Giada Zampano, Dow Jones Newswires; +39 06 69766925; giada.zampano@dowjones.com