Latvia, Mergers and take-overs, Technology

Economics Minister Ralfs Nemiro (KPV LV) told LETA that the two companies’ shareholders – the Transport Ministry, the Economics Ministry and Telia Company – discussed matters concerning the future perspectives of Tet and LMT.

Nemiro said that the shareholders’ aim is to increase the companies’ revenue, which might be achieved through optimization, but that it is too early still to discuss the two companies’ merger.

In the minister’s words, the shareholders are considering several options for Tet and LMT, which include preservation of their current status co, a merger and a takeover. The shareholders are expected to choose the best scenario by the end of May.

A proposal on the two telecommunications companies’ future might reach the Cabinet of Ministers in June or July, Nemiro said.

As reported, in November 2017, the government decided not to go ahead with the proposed merger of Tet and LMT.

In July 2018, then Prime Minister Maris Kucinskis (Greens/Farmers) and Telia Company’s President Johan Dennelind signed a memorandum of understanding on Tet and Latvijas Mobilais (LMT) telecommunication companies’ further development.

By signing the memorandum, the parties pledged to work out a single Tet 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.

In August 2018, Kucinskis issued a decree to set up a task force to ensure representation of Latvia’s interests in development of the strategy for Tet and LMT.

Scandinavia's Telia Company has warned 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 percent of LMT shares.

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