Latvia, Markets and Companies, Mergers and take-overs, Technology, Telecomunications

According to Prime Minister of Latvia Maris Kucinskis’ decree, the task force will be headed by Edvins Karnitis, a representative of the Inter-Institutional Coordination Center, shile Privatization Agency’s board chairman Vladimirs Loginovs and Public Utilities Commission’s representative Andris Virtmanis have been appointed deputy heads of the task force. The task force team will also include Treasury administrator Kaspars Abolins, Transport Ministry’s representative Valters Bajas, Economics Ministry’s representative Ieva Jaunzeme, and Justice Ministry’s deputy state secretary Laila Medina.

The task force by November 15, 2018 will have to prepare Latvia’s position for the joint strategy of Lattelecom and LMT development in line with the memorandum of understanding signed earlier by the Cabinet of Ministers and Telia Company. By January 1, 2019, the task force will have to prepare the plan of the tasks that should be completed in this respect.

As reported, Prime Minister Maris Kucinskis (Greens/Farmers) and Telia Company President Johan Dennelind have signed a memorandum of understanding on Lattelecom and Latvijas Mobilais Telefons (LMT) telecommunication companies’ further development.

The prime minister’s representatives said that the memorandum cannot be considered an international agreement and it does not entail any legal consequences for any of the parties as the document essentially is a protocol of intent. It is a commitment to sit down at the negotiations table to work out a mutually agreeable strategy for further cooperation and development of Lattelecom and LMT.

Kucinskis indicated that such a memorandum was necessary to ensure a successful development of the telecommunication companies and cooperation between them also in the future.

By signing the memorandum, the parties pledge to work out a single Lattelecom and LMT strategy aimed at achieving synergy between the two companies as they phase in the next generation communication systems and strive for innovative excellence.

It has also been reported that the Latvian government decided in November 2017 not to back the plan to merge LMT and Lattelecom.

Scandinavia's Telia Company had warned the Latvian government that it could sell its shares in LMT and Lattelecom if the two companies are not merged.

Telia Group companies Sonera Holding and Telia Company own 49% of LMT shares altogether, while Latvian Radio and Television Center and Latvian Privatization Agency – 28%. Lattelecom, which belongs to Telia and the state of Latvia, owns 23% of LMT shares.

Telia Group company Tilts Communications owns 49% of Lattelecom shares, and Latvian Privatization Agency the other 51%.