Telefonica seals Telecom Italia deal: Ansa

Spain's Telefonica has reached a deal to raise its stake in the shareholding pact that controls Telecom Italia (Milan: TIT.MI - news) , Italian media reported late Monday.

The Spanish communications giant, which currently owns 46.18 percent of shareholding pact Telco, will raise its stake to 65 percent, Italian news agency Ansa reported.

It will pay one euro per share, and also has an option to further increase its holding to 70 percent.

The remaining shares of Telco are held by Italian banks Intesa Sanpaolo (Milan: ISP.MI - news) and Mediobanca (Milan: MB.MI - news) , which each have 11.62 percent currently, and Generali, which has 30.58 percent.

Telecom Italia, once the national telephone company, has been struggling with a price war in the market and with the recession.

In March, it posted a net loss of 1.627 billion euros ($2.1 billion) for 2012, hit by an asset write-down of more than 4.4 billion euros in part on investments in Brazil.

Telecom Italia's shares closed sharply up on the Italian stock market on Monday at 3.42 percent.