The deal is set to cost €289 million, which together with Eesti Energia taking on Nelja Energia's net debt of €204 million (as at year end 2017), makes the entire deal worth nearly half a billion Euros.

The sale is thus the third largest to have taken place in Estonia, second only behind the 2005 takeover of Hansa Bank by Swedbank for a reported €1.7 billion and the 2006 take over of Silja Line ferries by Tallink for €550 billion.

Nelja Energia shares to be transferred to Eesti Energia subsidiary

The Nelja shares are due to be transferred to Eesti Energia subsidiary Enefit Green, which operates a large part of Eesti Energia's bio energy operations including wind (it operates four windfarms), hydro and solar power plants, three combined heat and power plants in Estonia and Latvia, and municipal waste-produced energy.

In any case the two companies' operations already overlap spatially - the Paldiski wind farm in Northern Estonia for instance has wind turbines belonging both to Eesti Energia and Nelja Energia.

The share transferral is subject to the approval of County Executive Board of Buskerud County Administration in Norway, the ultimate owner of the Vardar Eurus AS copmany, which owns a reported 77% of Nelja shares.

The remaining 23% of the shares are to be acquired by Eesti Energia from a number of Estonian-based minority shareholders.

These include companies belonging to Neja Energia board members Martin Kruus (Solarcom OÜ) and Kalle Kiigske (Atradius OÜ),.

Final terms and conditions of the contract as well as the final price are still to be agreed.

Nelja Energia board chairman Martin Kruus was keen to stress that the sale of Nelja would not disrupt the day to day running of the company, and that the final maturity of the company shares depended on various factors including the competition authority's procedures and could not be stated yet.

''We hope that by the end of the year at the latest we'll have cleared the decks,'' said Kruus.

Eesti Energia's rationale in the takeover

Eesti Energia's long term strategic goal is to grow the share of electricity generated from renewable and alternative sources in its production portfolio to 40%.

Eesti Energia chief Hando Sutter also said that since the Estonian state expects Enefit Green to enter the stock market as a minority shareholder, then all interested parties will have the chance to partake in its growth.

''Regarding the planned first issue of shares, Eesti Energia will provide additional information as soon as the preparatory work has reached the appropriate strategy,'' said Sutter.

Enefit Green managing director Aavo Kärmas added that with the acquisition of Nelja Energia, Enefit Green is set to become the fastest growing producer of renewable energy in the Baltic region.

Kärmas also said that with the acquisition of Nelja Energia, the increased volume of generation would help it to expand and grow in the renewable energy market in those neighbouring countries where the parent company Eesti Energia already has a presence, in other words the three Baltic states, Finland and Poland.