Iliad Group is exploring a possible tie-up with Telecom Italia (TIM) in Italy.

Reuters reported that Iliad Group, which is owned by Xavier Niel, has met with Italy's economy minister and top government officials this week.

The report added that Iliad CEO Thomas Reynaud told officials that a deal would not break TIM up and would not impact the company's workforce.

The Italian government has a stake of around 10 percent in TIM and sees the telco as a strategic asset.

Iliad launched mobile services in Italy back in 2018, two years after the company's Italian subsidiary was created after acquiring spectrum given up by Wind Tre, following the merger of 3 Italy and Wind.

At present, the carrier serves more than 11 million customers in the country, but has repeatedly called for consolidation in Italy, failing in its efforts to acquire Vodafone last year, which opted to sell its Italian unit to Swisscom instead.

Iliad wants the Italian market to consolidate down from four players to three.

Italian state lender CDP is TIM's second-largest investor behind France's Vivendi, although Vivendi wants to sell its stake in TIM, following the company's €22bn ($22.8bn) sale of TIM's fixed network spin-off NetCo to investment firm KKR last year.

CVC Capital Partners is interested in buying Vivendi's 24 percent stake.

Vivendi heavily opposed the sale of TIM's fixed network after TIM approved a sale last year without making it conditional on a vote by shareholders. Instead, the board voted 11-3 in favor of the deal.

Last month, an Italian court rejected Vivendi's request to annul the sale of TIM's landline grid to investment firm KKR.

TIM declined to comment on the report, noted Reuters.