The Estonian Competition Authority has approved the transaction in which Elisa will acquire 100 percent of the shares in AS Starman from Polaris Invest and Com Holding, Elisa said in an announcement to the stock exchange Thursday.
Elisa estimates that the deal will be closed sometime during March or April of this year.
Sami Seppänen, CEO of Elisa Eesti AS, said that the Competition Authority's decision offers the opportunity to begin building a joint company able to offer its clients both connectivity and entertainment services.
"A large company with almost 1,000 employees will emerge on the market offering its clients a broad selection of services," Seppänen said in a press release.
The CEO described the Starman-Elisa merger as a natural course of events, as in today's world, connectivity and entertainment are becoming increasingly intertwined.
"Boundaries are becoming increasingly blurred," he commented regarding the reason behind Elisa's acquisition. "The experience of watching videos on a smartphone has become increasingly important and television in turn is moving onto smart devices."
The goal has been set to build a joint company within one year, Seppänen said. "Two successful companies are stronger still together and there is a lot of synergy involved," he noted. "The most important synergy is widening the selection of services for the customer. We will be on the market with united services and new solutions within one year at the latest."
Starman is currently the number one service provider in pay TV services and number two in fixed broadband services in Estonia, accounting for 35 and 20 percent of market shares, respectively.
Elisa announced in mid-December that it had purchased full ownership of Estonian telecommunications company Starman from Polaris Invest, a company owned by Indrek Kuivallik, and Com Holding for a cash consideration of €151 million.
Elisa said at the time that the transaction was consistent with its strategy to strengthen its market position in its home markets. The newly-acquired business creates a new integrated operator, which will enable Elisa to widen its customer base in Estonia and expand the service offering to both Elisa and Starman customers. The deal is expected to have a positive effect on earnings per share in 2017 already, it noted.
At the end of the third quarter of 2016, Starman had approximately 122,000 cable TV subscriptions, 88,000 broadband subscriptions, 60,000 digital terrestrial subscriptions as well as 30,000 telephony subscriptions.
Editor: Aili Vahtla