Eesti Gaas will acquire the Latvian gas distribution network owned by Gaso, a subsidiary of Latvijas Gaze, for €120 million.
Eesti Gaas, the largest privately owned energy company in the Baltic and Finnish region, signed an agreement on Friday.
The transaction is subject to approval from the Latvian Competition Authority and permission from the Latvian government, as Gaso is considered a strategic asset.
The Latvian gas network is almost four times larger than Estonia's, serving about 400,000 consumers, Ain Hanschmidt, chairman of the board of Eesti Gaas, said in a statement.
"We see a future in gas and know how to do this business and grow it. We hope that we can share our experience as a gas network operator and that the change of ownership will help the company continue to grow and provide the best service to Latvian gas consumers," he said.
"Like the rest of Europe, we see gas playing an important role as a transition fuel and a supporter of renewable energy. The prospect of gas use encourages us to invest in gas networks – we have signed the agreement and are waiting for the decision of the Latvian government," Hanschmidt added.
Eesti Gaas operates in Finland, Latvia, Lithuania and Poland under the Elenger brand.
Eesti Gaas provides natural gas to customers in the form of pipeline gas, compressed natural gas (CNG) and liquefied natural gas (LNG) and manages the largest gas network in Estonia.
Editor: Helen Wright