Latvian gov't likely to mull sale of Baltic media business owned by Sweden's MTG

The Latvian government is likely to look into a deal in which Swedish media giant Modern Times Group (MTG) is selling its Baltic media business, a representative of the Latvian Economics Ministry said on Friday.

Sweden's MTG announced on Friday that it is selling its broadcasting business in Latvia, Lithuania and Estonia to U.S. asset management firm Providence Equity Partners for 115 million euros (123.5 million U.S. dollars).

For the deal to be closed, it has to be approved by the Baltic states' national regulators.

On Thursday, Latvian lawmakers passed in the first reading draft amendments to the National Security Law and the Commercial Law to empower the Cabinet of Ministers to suspend sale of strategic enterprises. The last reading of the draft legislation is scheduled for next week.

The Economics Ministry's parliamentary secretary Vilnis Kirsis told Latvian public media website lsm.lv that it was not clear whether the sale of MTG's Baltic business had already been closed, but if the above amendments are adopted before the deal is closed the parties involved in the transaction will have to ask the government to approve it.

If the deal is closed before the bill is passed in the final reading, the government, most probably, will look into the transaction anyway to vet the new owners of the media business from the standpoint of national security.

If Providence Equity Partners are found to be unacceptable, "the government may ask to sell the stake in the last resort scenario," the ministry's representative said.

Visvaldis Valtenbergs, a researcher at the Advanced Social and Political Research Institute at the University of Latvia, said the deal represents risks to the diversity of media content.

The expert believes that because of the current uncertainty in the private media sector it would be necessary to strengthen public media.

The Latvian Competition Council, whose permission will be needed to close the deal, has not yet received an officially notification about the deal, its spokeswoman Paula Vilsone said.

Providence already owns Bite, a mobile services provider operating in Latvia and Lithuania.

In Latvia, MTG owns TV3, TV3+, TV6, Kanals 2 and LNT TV channels, StarFM radio station, as well as TVPlay and Skaties online portals.