Spanish telecom company Telefónica has abandoned its plans to purchase a 5.4 per cent stake in Telecom Italia and form a strategic alliance.

Spanish telecom company Telefonica has abandoned its plans to purchase a 5.4 per cent stake in Telecom Italia and form a strategic alliance. It was negotiating with Italian tyre and real estate comapny Pirelli to purchase a part of the latter’s stake in Telecom Italia. Pirelli owns Olimpia, Telecom Italia’s largest shareholder with 18 per cent stake in the company. Telefónica was initially considering acquiring 30 per cent of Olimpia, which would translate into control of 5.4 per cent of Telecom Italia.