Estonian energy group Alexela Energia is to purchase electricity seller 220 Energia. The price of the transaction, however, will not be disclosed by the parties to the sale.
"Alexela wishes to offer its customers comprehensive energy solutions," Alexela Energia CEO Maria Helbling said in a press release on Tuesday. "An expanded electricity portfolio will enable us to be a good partner to even more customers. 220 Energia has proven itself as a good participant in the energy market which has developed its own customer base."
According to Ms. Helbling, the transaction will not involve any changes for the smaller company's customers and partners — the 220 Energia company and trademark will remain, as well its current website and contacts.
"We are not planning any other transactions on the retail market at present," Ms. Helbling told BNS. "But the list of market participants is relatively long, and it seems quite inefficient. That is, consolidation could be logical."
The market share of the merged companies would amount to 7%, she added.
According to 220 Energia management board member Marko Allikson, the energy market has reached a more mature consolidation phase, in which a new market share will have to be acquired for rapid further growth, which has made market participants seek merger opportunities. Allikson said that the decision was made to sell 220 Energia's shares to Alexela specifically due to the similar value proposition of the companies, which creates a basis for the continued satisfaction of existing customers.
"Alexela is a very similar electricity and gas seller to 220 Energia, and merging into a joint group will give an added value to 220 Energia's current customers — our customers will be part of Alexela's offers, and the company's long-term capability of offering a competitive alternative to former electricity and gas monopolies linked with network companies will increase as a whole," Mr. Allikson explained.
220 Energia is an electricity seller based on Estonian private capital. The company's revenue last year rose 2.3% on year to €7.1 million, while the company moved from a loss of €100,400 in 2016 to a profit of €60,200 in 2017.
Alexela is an Estonian capital-based holding company that brings together companies related to the same circle of owners over the last two decades into the uniform structure of Alexela Group as an umbrella organisation. Alexela Group operates in three areas — energy, the metal industry and property development — and employs more than 1,000 people.
Editor: Aili Vahtla