Canada Pension Plan Investment Board has agreed to acquire a minority stake in Telecom Italia SpA’s landline network.

The investment firm is taking a 17.5 per cent stake for as much as €2 billion (US$2.2 billion), CPP Investments said in a statement Friday. It joins a group of investors led by KKR & Co. in buying the former phone monopolist’s grid. The transaction gives the newly defined business, called NetCo, an enterprise value of about €18.8 billion.

The investor group also includes a wholly owned subsidiary of the Abu Dhabi Investment Authority, the Italian infrastructure fund F2i SGR SpA and Italy’s Finance Ministry. 

The investor group plans to upgrade the existing copper network with fiber-based services and drive efficiencies in the business, CPP Investments said. The Italian telecommunications company sold off its fixed network in an effort to reduce debt.

Telecom Italia shares rose as much as 7.7 per cent to about 23 cents in Milan on Friday. The day before, the phone carrier’s shares plunged the most ever, wiping out about €1.4 billion of market value as investors expressed skepticism about the company’s plans for reducing debt.

Lead investor KKR agreed to buy Telecom Italia’s fixed landline network, its most valuable asset, in a €22 billion deal last year. The sale was cleared by regulators in January. Italy has one of the most competitive telecom markets in Europe, in part because of discount carrier Iliad SA, which entered the country in 2018 offering cheap, no-frills mobile plans, sparking a price war.

CPP Investments has made 29 direct investments in 13 countries totalling $51.8 billion as of the end of 2023. These include communications infrastructure companies such as Boldyn Networks, Cellnex Telecom and V Tal-Rede Neutra de Telecomunicacoes.