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BUZZ-Telecom Italia lifted by Italy mobile M&A talk

** Shares in Telecom Italia (Other OTC: TIAJF - news) rise more than 2 percent, topping gainers in a weak Milan market.

** Traders and analysts cite speculation over possible consolidation in the Italian mobile market.

** Reuters reported on Tuesday that Hutchison Whampoa (Berlin: HUWA.BE - news) had resumed talks with Russian telecoms group Vimpelcom (NasdaqGS: VIP - news) over merging their Italian mobile firms.

** An analyst says the possible tie-up would be positive for all four mobile operators in Italy, which have been hit by a fierce price war to win over customers.

** On May 28 Goldman Sachs (NYSE: GS-PB - news) raised its target on Telecom Italia to 1.50 euros, saying it saw the group as a key beneficiary of an expected consolidation in the telecoms industry. (RM (LSE: RM.L - news) :stefano.rebaudo.thomsonreuters.com@reuters.net)