September 4, 2014 / 12:11 PM / 3 years ago

Latvia to offer to buy gas utility shares from E.ON

RIGA, Sept 4 (Reuters) - Latvia’s government will submit a non-binding offer to buy a 47.2 percent stake in gas utility Latvijas Gaze from Germany’s E.ON, a spokeswoman said on Thursday.

Latvijas Gaze imports gas from Russia and operates one of the biggest gas storages in Europe, Incukalns. Russia’s Gazprom owns 34 percent of Latvijas Gaze and gas trader Itera Latvija has another 16 percent.

“The government will submit a non-binding offer (to E.ON),” said Dzeina Tamulevica, a spokeswoman for Latvian Prime Minister Laimdota Straujuma, declining to elaborate.

Straujuma told Reuters in June that E.ON asked for a price of 220 million euros ($287 million), but that was too high and the government was in no rush to buy.

E.ON’s stake in Latvijas Gaze is worth around 176 million euros at the current market price, according to Reuters calculations.

Germany’s top utility has already sold its assets in the gas utilities of neighbouring Lithuania and Estonia, and is negotiating a sale of its stake in Finnish utility Gasum.

E.ON’s exit from the Baltic states has been triggered by EU-driven gas market reforms aimed at separating gas supply and transportation ownership.

Latvia plans to keep Latvijas Gaze intact until April 2017, when an agreement with the current owners to operate Incukalns expires.

1 US dollar = 0.7617 euro Reporting by Aija Braslina; Editing by Mark Potter

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