TALLINN - Elion, Lattelekom and Lietuvos Telekomas announ-ced their intention to sign a cooperation agreement this week to collectively take over Microlink, the Baltics' leading information technology firm.
In accordance with the agreement, Elion Enterprises, a subsidiary of Eesti Telekom, will acquire 95 percent of Microlink Eesti, which will work as an independent branch of the Elion group. Microlink Latvia will be bought by Lattelekom and Microlink Lithuania by Lietuvos Telekomas.
All three of the telecommunications companies are largely controlled by TeliaSonera, the Swedish-Finnish telecom operators.
The value of the deal was not disclosed.
Microlink's major owners are the Baltic Republics Fund, the Baltic Investment Fund, Astro Holding, and employees and founders of the company.
The switch of ownership will take place only after Estonian, Latvian and Lithuanian competition authorities approve the deal.
In Estonia, Eesti Telekom said in a statement: "The purpose of the acquisition of Microlink is to further strengthen Elion's and Microlink's position on the Estonian IT market and offer customers a wider selection of telecommunication and IT services and whole solutions."
Elion's IT services operation will be transferred to Microlink, and the latter's Internet and data communication operation, to Elion.
Microlink will be responsible for the whole Elion group's IT service operations and Elion for sale of both whole solutions and IT services to small and medium businesses, as well as management of large customer accounts.
"Under the rules of the Tallinn Stock Exchange, the present transaction cannot be treated as acquisition of a significant holding and therefore the parties are by mutual agreement not going to disclose the exact price of the deal. The cost of the Microlink Eesti holding to Elion is below 100 million kroons (6.4 million euros)," Eesti Telekom noted.
Valdur Laid, CEO of Elion, told reporters May 17 that the acquisition would not lead to a major changeover in Elion or Microlink management.
The two companies at present employ some 1,640 people in Estonia.
He voiced hope that after Microlink's major owners accepted the offer small shareholders would warm to the deal and there would be no need to apply the mandatory takeover procedure. He added that an offer would be made to holders of the remaining 5 percent of Microlink shares on similar conditions.
