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10/03/2005 - 03:00 PM

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Telecom Italia Media: Board passes resolution on La7 Televisioni merger with Telecom Italia Media

At today’s meeting chaired by Riccardo Perissich, the Telecom Italia Media Board of Directors (Telecom Italia Group) passed a resolution to merge La7 Televisioni SpA into Telecom Italia Media SpA.

As announced on September 6, this is the final step in Telecom Italia Media’s restructuring plan, now that the Buffetti Group has been disposed of. By rolling La7 into Telecom Italia Media, the company will be able to rationalize its capital structure and complete its strategy of refocusing on its core media business, while at the same time achieving efficiency gains in its holding company structure and simplifying operational, administrative and corporate management processes. Once the merger is complete, TI Media will hold direct control over MTV Italia and Telecom Italia Media Broadcasting, in which La7 currently has an equity interest.

The merger was also approved in a resolution passed by the La7 Board of Directors. The merger will not result in any changes to Telecom Italia Media’s company bylaws, nor will it entail an increase in Telecom Italia Media share capital in service of the merger, as Telecom Italia Media already holds 100% of La7 shares; upon merger, the La7 shares will be cancelled without exchange.

Though the merger has no fiscal repercussions, it will generate a share cancellation deficit on the company balance sheet, the exact amount of which will be calculated during merger implementation. The merger will have no effect on TI Media’s consolidated assets and liabilities, earnings or financial position.

Once the merger has been completed, Telecom Italia Media shall take over all of La7’s rights and obligations, and continue in all legal relationships existing prior to the merger, including concessions, licenses and government authorizations to operate as a private television broadcaster over terrestrial frequencies, and to run trials of digital terrestrial technology.

The merger takes effect from the final date on the merger deed registration document, or from a later date as stated in the deed itself, which is scheduled to be drawn up in December 2005. For accounting and tax purposes, La7 operations are expected to be entered on Telecom Italia Media accounts as from January 1, 2006. The fiscal effects of the merger will also commence from that date.

Milan, October 3, 2005