Several dozen potential strategic investors have been identified for the technology companies SIA “Tet” and SIA “Latvijas Mobilais Telefons” (LMT), Minister of Economics Viktors Valainis (Union of Greens and Farmers) said on Tuesday in an interview with TV3’s “900 Seconds”.
“These types of companies must be sought internationally. Such companies have been identified – there are several dozen,” the minister said, adding that some companies have independently expressed interest.
He also emphasized that there will never be a time when the state manages Tet and LMT entirely on its own.
“Talks about the future development scenarios of these companies began because their current model indicates a negative development trajectory,” said Valainis, adding that over the past ten years, the companies have lost several hundred million euros in potential value.
As previously reported,
in mid-July this year, the Swedish company “Telia Company” (Telia) signed a memorandum of understanding with Latvia,
AS “Latvenergo” and the state-owned “Latvijas Valsts radio un televīzijas centrs” (LVRTC) regarding the sale of all its shares in Tet and LMT.
The parties aim to sign a final agreement by the end of 2025, with the transaction expected to be completed in the first half of 2026.
According to Latvenergo CEO Mārtiņš Čakste, more specific transaction details may be known within six months. The involved parties will conduct in-depth due diligence and other preparatory work to assess the feasibility of the deal.
If the transaction proceeds, Latvenergo and LVRTC, together with SIA “Publisko aktīvu pārvaldītājs Possessor” (Possessor) and an international investor, would gain full control over both telecommunications companies. To achieve this, a strategic international investor with significant experience in the tech sector will be brought in. A global consultant will be selected through an open tender to recommend the best possible deal structure and financial investor.
It has also been reported that until now, the negotiations with Telia regarding the future of LMT and Tet were conducted by representatives of the Ministry of Economics. However,
the state-owned Latvenergo and LVRTC are now authorized to make offers for the buyout.
Unofficially, the transaction value has been estimated to be several hundred million euros, potentially up to half a billion.
Several scenarios have been discussed in the talks between the Latvian state and Telia – ranging from the merger of Tet and LMT to maintaining the current situation. Options included fully or partially buying back both companies from Telia or separating certain assets.
Previously, a complex ownership and management structure was created for Tet and LMT, which the two main shareholders – the Latvian state and Telia – have so far failed to reform.
The state, through Possessor, owns 51% of Tet, while Telia’s subsidiary Tilts Communications holds 49%. In LMT, 49% of shares are owned by Telia and its subsidiary Sonera Holding, 28% by the state through LVRTC and Possessor (5%), and the remaining 23% by Tet.
Theoretically, this means that
through Tet, Telia holds a 60.3% stake in LMT, while the Latvian state holds 39.7%.
However, in practice, this is not the case— the state effectively holds decisive control over LMT, since it has a majority in Tet. At the same time, this structure has delayed several strategic decisions that require consensus.
Initially, Telia proposed a scenario in which both major shareholders – the state and Telia – would each hold 50% of LMT, which would first acquire Tet’s telecommunications business. Later, an initial public offering (IPO) was proposed, listing 20% or more of LMT shares on the stock exchange. Both shareholders would sell part of their shares in the public offering.
State officials have not officially commented on this proposal but rejected the idea of selling the state’s shares.
LVRTC has previously expressed readiness to financially participate in buying out Tet or its assets, such as its fiber-optic network. This option was also supported by LMT President Juris Binde, who noted that LMT could acquire Tet’s customer portfolio. Meanwhile, Tet CEO Uldis Tatarčuks has previously stated that Tet could purchase LMT shares.
It has been unofficially suggested that Latvenergo could be one of the companies through which the transaction would be executed, since the government was not willing to use state budget funds for the buyout of LMT and Tet.
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