Marco Tronchetti Provera, chairman and chief executive officer (CEO) of the Pirelli SpA tires and cables group and Gilberto Benetton, chairman of the Edizioni Holding SpA investment group, confirmed Monday that they intend to have a hands-on management role in running Telecom Italia SpA, which they took control of Saturday in a 7 billion euro (US$6.14 billion) deal.

Tronchetti Provera will be chairman and Benetton vice-president of the Italian telecommunication group, while Carlo Buora, a finance director at Pirelli, and Enrico Bondi, the former CEO of the Montedison SpA chemicals company, will be joint chief executive officers, Pirelli said in a prepared statement. The Benetton Group has interests in fashion, motorways, catering and telecommunication.

Pirelli and Benetton now control 27 percent of Olivetti SpA, after buying a 23 percent stake from the Luxembourg holding company Bell SA on Saturday. Olivetti controls 55 percent of Telecom Italia, which owns a 56 percent stake in Telecom Italia Mobile (TIM) SpA, one of Europe's leading mobile operators, and a 61 percent stake in Seat Pagine Gialle SpA, Italy's largest ISP (Internet service provider).

The new owners of Telecom Italia intend to develop its potential in Italy and elsewhere by concentrating on industrial management instead of viewing control of the company as a financial investment, Benetton said in an interview with the Milan daily Corriere della Sera published Monday. "As investors we have always wanted to have a role that kept us close to our companies and made us active participants in their strategies and management choices," he was quoted as saying.

The reduction of Olivetti's 14 billion euro debt will be a top priority, Tronchetti Provera told analysts in a conference call Monday. This may be achieved through a merger of Olivetti and Telecom Italia, he reportedly told the analysts. The new company controlling Telecom Italia will be 60 percent owned by Pirelli and 20 percent by Edizioni Holding, with the rest likely to be bought by the Italian banks Unicredito and Intesa BCI, he told the analysts.

Pirelli will sell its truck tires and energy units over the next 18 months, which is expected to bring in at least 2 billion euro, the Pirelli statement said.

Analysts generally welcomed the takeover, observing that the new owners were able to finance the acquisition without heavy bank borrowing and that they would be able to concentrate on running the company without the distraction of judicial investigations facing outgoing Chairman and CEO Roberto Colaninno. Colaninno, who denies wrongdoing, is under investigation for alleged conflict of interest in the purchase of Seat.

Tronchetti Provera is credited with turning around the fortunes of Pirelli in a decade. In a lucrative deal last year, he sold two fiber-optic units to Cisco Systems Inc. and Corning Inc.

"I sold a fiber-optics group that was worth little more than 400 billion lire (US$181 million) and was losing money," Provera told a press conference Saturday. "With the capital gains from that sale -- about 7 trillion lire -- I have bought myself Telecom Italia."

For Carlo Cimino, head of research at Metzler Capital Markets in Milan, it is too early to say what the consequences of the takeover will be for Telecom Italia.

"The direct debts are still there and the leverage of Olivetti is the same," Cimino said in an interview. "There is no doubt that these are capable people, but we are taking a cautious view until we have seen the new business plan. Tronchetti Provera has paid 4.17 euros for Olivetti shares which are worth much less on the open market."