TeliaSonera Angling to Acquire Latvian Mobile Operator

By Narayan Bhat

TMCnet Contributing Editor

 

Nordic and Baltic regions’ dominant telecom operator TeliaSonera said on Monday it has signed a Memorandum of Understanding with the Latvian government and the management buyout consortium of Lattelecom, to increase its shareholding in the mobile operator Latvijas Mobilais Telefons SIA (LMT) to 100 per cent from 60.27 per cent.

 

This is a major breakthrough in Latvia’s telecommunications industry after the Latvian government decided to privatize the two state-owned telecom companies in 2005. Lattelecom, established in 1994, is the Baltic country’s largest fixed-line telephone company. LMT is the oldest of the three mobile phone operators in Latvia.

 

The agreement will lead TeliaSonera to acquire the Latvian government’s 28 per cent and Lattelecom’s 23 per cent shareholdings in LMT, increasing its direct shareholding to 100 per cent.

 

As part of the deal TeliaSonera will divest its 49 per cent stake in the Latvian fixed line operator SIA Lattelecom (Lattelecom).

 

As TeliaSonera sell its 49 pct holding, the Latvian government would give up its 51 per cent holding in Lattelecom to the management buyout consortium of Lattelecom.

 

The transaction is, however, subject to final agreements between the parties on terms and conditions.

 

The press statement released by TeliaSonera gave no more details about the deal.

 

The news about the Latvia Government’s decision to sell its telecom companies to Sonera was first broken by International Herald Tribune. The July 26th edition of IHT reported the decision quoting the country’s Transport Minister.

 

Transport Minister Ainars Slesers spoke to IHT after a Cabinet working group met with TeliaSonera representatives to agree on the details of the sale of state-owned Lattelecom and LMT companies. He had said that government would make up to 425 million lats (€600 million; US$830 million) from the deal.

 

“TeliaSonera, which already has a 49-percent stake in each company, has been open about its ambition to gain full control of both. The Latvian government controls the other 51 percent,” IHT had opined.