Latvia’s Competition Council (KP) has permitted Estonian Eesti Gaas to acquire decisive influence over JSC Latvijas gāze’s owned gas distribution system operator in Latvia JSC Gaso, as confirmed by the council’s representatives.
KP did not find any major effect on competition from this deal, and so permitted the purchase.
After looking at the information provided by companies and what was available to the council, KP concluded the merge would not significantly change the market structure,
nor will this reduce competition or create a dominant position on markets affected markets in Latvia. This is why the deal was permitted.
Eesti Group companies sell their customers pipeline gas, liquefied natural gas, compressed biomethane and compressed natural gas. They also manage the biggest gas distribution network in Estonia.
Eesti Gaas Group is also engaged in gas wholesale trade on the international market.
Additionally, this group is also engaged in solar energy production and sales, as well as retail trade of electricity.
Eesti Gaas subsidiary LLC Elenger sells natural gas and electricity to households and corporate clients in Latvia. Additionally, LLC Elenger and Estonian Elenger Marine offers clients LNG solutions outside the network. Aside from them, other Eesti Gaas group companies are active in Latvia. This includes JSC Infortar, whose operations are associated with electricity generation and other activities.
Gaso is the sole gas distribution system operator in Latvia. It ensures gas supplies from the distribution system to the end consumer.
Gaso ensures development of the distribution infrastructure, construction of gas connections, use of the system itself and records of natural gas consumption.
Because Gaso and Eesti Gaas subsidiary Elenger Latvija operate in two consecutive stages of the natural gas supply and distribution process, the markets in which both market operators are active are vertically linked.
KP notes that after looking at Eesti Gaas and Gaso vertical integration, it is important to keep in mind the regulations that influence both companies,
such as the Energy Law and accompanied regulations that to not provide gas traders the rights to participate in the actual provision of natural gas distribution system services or the supply of natural gas.
In the middle of April, Latvijas gāze signed the final deal regarding the sale of Gaso to Eesti Gaas.
At the end of April Eesti Gaas announced having turned to the Latvian Cabinet of Ministers with a request to acquire Gaso, because it is a commercial enterprise important to national security.
This year Latvijas gāze commenced Gaso sale procedure. The reason is because in accordance with existing regulations Gaso is not allowed to managed by Russian or Belarusian shareholders.
Latvijas gāze also has shareholders representing the Russian Federation.
Last year Gaso’s revenue, according to provisional data, was EUR 52.46 million, which is 11.3% less when compared with 2021. The company also suffered losses worth EUR 1.751 million.
Latvijas gāze is Gaso’s sole shareholder. Latvijas gāze’s shareholders, on the other hand, include Russian Gazprom (34%), Marguerite Gas II.S.a.r.l. (28,97%), German Uniper Ruhrgas International GmbH (18,26%) and LLC Itera Latvija (16%).
Eesti Gaas’ sole shareholder is the Estonian investment company Infortar, which is owned by Estonian businessmen Ain Hanschmidt, Enn Pant and Kalev Järvelill.
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