Competition, Estonia, Tourism

International Internet Magazine. Baltic States news & analytics Saturday, 21.09.2019, 18:45

Estonian competition watchdog prohibits merger of Estravel, Wris

BC, Tallinn, 19.08.2019.Print version
The Estonian Competition Authority has prohibited travel services group Estravel from acquiring a majority holding in the Wris travel agency, сообщает LETA/BNS.

The Competition Authority said, commenting on the decision delivered on Friday, that the merger would distort competition in the market, first and foremost by resulting in a dominant market position or the strengthening thereof.

Estravel Holding sought to acquire 75%t of shares in Wris. The Competition Authority requested an extension in late April for deciding whether or not to endorse the transaction.

Wris is owned by Aili Kagu through a holding company Aka Holding OU. Kagu bought the company which previously belonged to the real estate management company Holostovi Kinnisvarahaldus, owned by Vjatseslav Leedo, in October last year.

The merger would have granted Estravel access to cheaper prices and procurement conditions in the international market due to the increased combined purchase volumes. 

Cheaper prices, in turn, would have granted the merged entity an opportunity to better compete with foreign travel agencies, which currently hold a notable share of the market due to cross-border purchases, which are not reflected in public data or national statistics.

Founder of Estravel Mark Aivo Takis said in the application submitted by Estravel to the Competition Authority in March that increasing the market share of domestic travel agencies in the Estonian market would entail both direct and indirect tax revenue for the state, which it is currently not getting. 

The consolidated revenue of Estravel totaled 76.8 mln euros in 2018, while the group's net profit was close to 1.4 mln euros. The sales revenue of Wris AS in 2018 amounted to 11.9 mln euros and its net profit to 211,000 euros.

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