Elion, EMT merger to be discussed in April

  • 2004-02-12
  • By TBT staff
TALLINN - Following months of speculation, business leaders have stated that talks on the merger of Elion and EMT, the fixed-line and mobile service providers owned by Eesti Telekom, will be held in April. Until then the companies will continue cooperating, Jaan Mannik, chief executive officer of Eesti Telekom, said.

The merger, according to analysts from Eesti Uhispank, Estonia's second largest bank, would bring synergy to the two companies and enable them to save on administrative costs.
Indeed, in an online news conference Feb. 5, Mannik said that Eesti Telekom was looking into possibilities to reduce taxes by various options, including share buybacks instead of payment of dividends.
The possible merger is also part of a Baltic-wide strategy of increasing effectiveness of operations and profitability on the part of TeliaSonera. Last month TeliaSonera's Baltic representatives stated that their company was interested in acquiring larger stakes in the telecommunication companies of Estonia, Latvia and Lithuania.
Baltic Tele AB, the company owned and set up by TeliaSonera to manage its stakes in Estonia, Latvia and Lithuania, holds a 48.91 percent stake in Eesti Telekom. The Estonian government owns 27.23 percent and may sell its stake in May when, according to the shareholders agreement, TeliaSonera will receive the right to increase its stake.
TeliaSonera controls 49 percent of Lattelekom through Tilts Communications and owns 60 percent of Lietuvos Telekomas.
Eesti Telekom, the holding company of EMT and Elion, the largest operators of mobile and fixed-line communications in Estonia, posted earnings a little over 1 billion kroons (63 million euros) in 2003, or 255,000 euros less than in 2002. Experts cite special offer campaigns from EMT at the end of the year as the main factors behind more modest earnings.
Valdo Kalm, CEO of EMT, said the company would not make major investments into the development of an elaborate third-generation network in 2004. He added that EMT has gained 26,000 contract clients in 2003.
"The number of corporate clients has grown. We will offer them telecommunication solutions in cooperation with Elion and programs targeted to the small and medium enterprise sector," Kalm said.
Analysts believe that talk about a merger of Elion and EMT moved forward after the former CEO of EMT, Peep Aaviksoo, left the company in November 2003.