Latvia, Legislation, Markets and Companies, Mergers and take-overs, Retail

As reported, Mego has signed an agreement on acquiring Palink.

The formation of bigger and stronger market players is positive both for competition and consumers, emphasized Kruzitis.

The acquisition of chain stores by another retailer, aimed at boosting its market share, is a common practice in the retail trade business. In this case, two well-known companies will merge, consolidating their positions on the food retail market.

It is currently difficult to predict if this will cause any major changes in the food retail sector in Latvia. Both retailers are well-known in Latvia and it is too early to comment their operations under the Mego brand, added Kruzitis.

LETA also reported, the Competition Council is to make the final decision on the deal.

If the Competition Council approves the agreement, 51 "Iki" stores will become retail outlets of Mego.

The Latvian branch of Palink, representing the "Iki" chain stores, is one of the largest food retailers in Latvia. Palink has been present in Latvia for nine years. In 2013, the company had 51 stores and employed more than 900 people.

On the other hand, Mego is one of the largest retail trade companies in Latvia, in business since 1999. Mego runs a total of 36 stores and employs more than 600 people. The company has stores in various cities and towns of Latvia: Riga, Aizkraukle, Baldone, Bauska, Broceni, Cesis, Jekabpils, Jurmala, Sauriesi, Liepaja, Talsi, Tukums, Valka and Ventspils. A total of 53 stores in Latvia operate under the Mego brand.

The Latvian branch of Palink was established in 2003, the company's share capital is LVL 60,000,000 (EUR 85.37 million). Since 2008, alliance "Coopernic" has been the largest shareholder in the company.