• 2006-06-14

cartoon by Jevgenijs Cheksters

There has been no other week like it in the past 15 years. In a span of three days, two deals worth well nearly $1.5 billion were sealed, lending a sudden and dramatic credence to post-Soviet economic reform in the Baltic states. Though the deals were utterly different, they both underscored the rising economic importance of Estonia, Latvia and Lithuania in the rapidly integrating European economy, and pointed to a future of increasing Baltic assertiveness in business across the continent.

In the case of Tallink-Silja Line, never before has a Baltic company so skillfully managed to take over a larger company 's and on such a scale. Several bids were made for the Finnish ferry operator, yet the final choice fell on Estonia's Tallink, which didn't shy from bidding aggressively. (Three cheers for Finno-Ugric cooperation.) As the Baltics' largest ferry operator, Tallink has long been one of the most ambitious corporations:. It has enlarged its fleet, sailed to new ports (Riga was among the new destinations this year) and now swallowed up its competitors. Silja's revenues amounted to 380 million euros last year. Tallink's came to 260 million. Equally noteworthy is the fact that the takeover comes just three months after Tallink purchased three fast ferries from a Greek company for 310 million euros. Add this to the approximate 550 million euro price tag for Silja, along with other investments, and one gets the sense of Tallink's appetite for expansion.

CEO Enn Pant, who prides himself on his financial wizardry, pulled off a corporate coup that will earn him leading honors in Baltic business history. Though it remains to be seen if he and his team will be able to capitalize on the two companies' synergies 's analysts agree that the price paid for Silja Line was on the high end 's Pant can at least be credited for creating the largest ferry operator in the region. When it comes to Baltic Sea transport, Estonians are now second to none.

In Lithuania, a deal of no less significance was sealed when Poland's PKN Orlen, the country's leading fuel retailer, agreed to purchase a 30 percent stake in Mazeikiu Nafta, the Baltics' only oil refinery, for a staggering $850 million. The contract represents both a risk and a possible bonanza for Lithuania, since the country is treading the same path twice in allowing a strategic investor from the West to figure out how to secure supplies from the East. The first attempt failed, though there is reason to believe that PKN Orlen, now Eastern Europe's largest crude refiner, will have more success in keeping the pipes at Mazeikiu full of crude.

In the meantime, Lithuania's coffers will soon burst from the arrival of nearly a billion dollars, essentially a once-in-a-lifetime mother lode, and it remains to be seen how the government 's whoever it may be 's will allocate the funds. If Lithuanians are wise, they'll turn to Mr. Pant for some friendly advice.