Estonia, Legislation, Markets and Companies, Mergers and take-overs, Telecomunications

The transaction is yet to be approved by the Competition Authority.

The main reason behind the deal is the wish of Eesti Meedia to upgrade its portfolio's television channel list with a fee-charging channel specialized on music programs, it can be seen from the summary of the concentration.

At present the majority holding in Ohk ja Paike is held by Sevenhead, a company owned by Eversheds Ots & Co barrister Tarmo Repp. Consultant of the team is the same law office. One of the owners is also a company belonging to businessman Rain Rosimannus, Vaadi OU.

Seitse is a fee-charging channel specialized on music programs.

Eesti Meedia is acquiring the music channel Seitse to strengthen its market position in niche channels which is a priority field for the company and the media group is not ruling out setting up a Russian-language channel or buying TV channels of the competitor Modern Times Group (MTG).

"The aim of the transaction is to strengthen the selection of television channels and to offer a selection also to the younger audience. We have set a clear goal to increase the number of our niche channels," CEO of Eesti Meedia Sven Nuutmann told BNS.

According to Nuutmann Seitse will definitely remain a music channel.

The group is also not ruling out creating a Russian-language channel. At the same time there are no concrete plans at the moment, Nuutmann said.

If Eesti Meedia were to create a Russian-language channel, it would be most likely be from scratch, Nuutmann said. He added that there have also been rumors about MTG planning to sell its Baltic operations and Eesti Meedia would definitely be interested in that if that were to come true.

According to Nuutmann the media group would be especially interested in MTG's Latvian TV channels. MTG owns all Latvian commercial TV channels and setting up a new channel in Latvia would probably not be profitable, he added. According to Nuutmann the situation in Lithuania is better than in Latvia, but there are still two very strong competitors and Eesti Meedia is not interested in competing with them.

TV channels at present owned by Eesti Meedia group are Kanal 2, Kanal 11 and Kanal 12. Eesti Meedia is owned by pharmaceuticals businessman Margus Linnamae through investment company Up Invest. He is also the owner of news agency Baltic News Service (BNS).