KP did not identify any material injury to competition and therefore decided to authorize the transaction.
As reported, Latvijas Gāze signed a final agreement on the sale of Gaso to Eesti Gaas in mid-April. At the end of April, Eesti Gaas submitted an application to the Competition Council for the assessment of the purchase transaction for Gaso, as well as an application to the Cabinet for a permit to purchase Gaso from Latvijas Gāze.
Latvijas Gāze started the sale process for Gaso this year, because under the current regulation, Gaso cannot be managed by Russian or Belarusian shareholders, but Latvijas Gāze has shareholders representing the Russian state.
“Gaso” is the only natural gas distribution system operator in Latvia. The only shareholder of Gaso is Latvijas Gāze.
Considering that the subsidiary company “Elenger Latvija” of AS “Gaso” and AS “Eesti Gaas” operates in two successive stages of the natural gas supply and distribution process, the markets in which the merger members operate are vertically related, KP said.
In assessing the information provided by the companies and at KP's disposal, KP concluded that the merger would not significantly change the market structure, would not weaken competition, and would not establish or strengthen the dominant position in the affected markets in Latvia, so the merger could be allowed.