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Wednesday 24.04.2019 | Name days: Nameda, Visvaldis, Ritvaldis
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CC: number of business merges on a rise in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn the first eight months of 2018, Competition Council made twelve decisions regarding business merges, which is 50% more than the number of similar decisions made in the same period of last year. Consolidation of market participants takes place the most often in retail trade of household goods, BNN was informed by the council.

The council permitted merges in all those twelve decisions. Merges were permitted because the council noticed no signs of a possible change of market structure as a result of those merges.

«The merge deals viewed this year most often affected sectors such as heating and electrical energy production, retail trade of non-food products, fuel retain trade, liquefied petroleum gas, car and car part retail trade, animal feed production, accommodation service, telecommunications services and non-life insurance service,» the council explains.

CC states that the trend for consolidation of businesses is on a rise. There are several reasons for that: better market positions, change of business focus, increased export capabilities, synergy among several companies with a goal to reduce costs, formation of a unified development policy and increase of competitiveness on the market.

Consolidation of businesses is also heavily affected by changes with demand in Latvia. Modern consumers value complex telecommunications, presence of internet and digital entertainment options, as well as the ability to watch TV wherever they want. Because of that, market participants actively search for solutions to help satisfy this demand. With that, there has been a lot of merging activity among telecommunications, media and businesses working with other technologies.

The council notes that this year, similar to last year, merging activity continued on the everyday household goods retail market. Smaller retail market participants are gradually becoming stronger in the current market structure. In spite of small retailers merging, Latvia still lacks any strong market players that would create pressure two of the country’s largest retail businesses – SIA Rimi Latvia and SIA Maxima Latvia.

CC currently has five more merge deals under review. In parallel to that, the council also provides consultations to several businesses in regards to matters associated with merging. So far this year businessmen have used this opportunity 33 times.

Competition Council’s permission for the merge is needed only cases when participating parties’ total turnover in Latvia was no lower than EUR 30,000,000 in the previous year and turnover of at least two participating parties was no lower than EUR 1,500,000 in the previous financial year.


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