The Latvian government and Competition Council have approved Eesti Gaas’ acquisition of Gaso, a subsidiary of Latvijas Gaze, the Latvian natural gas distribution network. Infortar, the proprietor of Eesti Gaas, has been waiting for this permission before making preparations to go public.
Eesti Gaas agreed to buy Latvijas Gaze’s subsidiary Gaso in mid-April, with the government agreeing in early June and the Competition Council agreeing at the end of last week. The transaction is worth more than EUR 120 million.
The acquisition is a logical progression, according to Margus Kaasik, chairman of the management board of Eesti Gaas, because the Estonian and Latvian gas networks are essentially one system.
“For us as a company, the acquisition of the Latvian distribution network is an important step in the expansion of Eesti Gaas as the largest privately owned energy company in the region,” he said.
Receiving Latvian approval to buy the company will also allow Infortar, the owner of Eesti Gaas, to press through with ambitions to go public, thus becoming a publicly-traded and owned entity.
Infortar’s board chair, Ain Hanschmidt, said in May that the company was able to organize an initial public offering (IPO) of shares as early as the spring, but the acquisition of the Latvian distribution network would have a significant impact on the company, so the plan to go public had been postponed until autumn.
The Latvian natural gas distribution network is 5,420 kilometers in length, and the company has over 375,000 customers.
Eesti Gaas is a company that operates in Estonia, Finland, Latvia, Lithuania and Poland and has become the largest privately owned energy company in the Baltic and Finnish region. (ERR/Business World Magazine)