Publication

The year 2024 was marked by an optimistic period of recovery for mergers and acquisitions (M&A) across the Baltics following a few challenging years.

According to Mergermarket data, a total of 231 M&A transactions were announced in the Baltics, with a combined value of EUR 2.1 billion — the third-largest volume since 2008 and a EUR 1 billion increase compared to the previous year.

Despite the ongoing geopolitical risks and economic uncertainty, increasing activity was observed. While the Latvian market traditionally lags behind Lithuania and Estonia, it demonstrated positive resilience, continuing consolidation efforts and attracting investments from industry leaders.

During 2024, Latvia witnessed a total of 77 transactions — a 35% increase on 2023.

The Baltic M&A market in 2024: global context and regional dynamics

Several key factors contributed to the growth of the Baltic M&A market during 2024:

Economic stabilisation: The decline in inflation and stabilisation of interest rates created a more favourable investment environment;

Private equity activity: Funds such as INVL Baltic Sea Growth Fund, Livonia, BaltCap, and other asset managers sought investment opportunities, particularly in the energy and technology, media, and telecommunications (TMT) sectors;

Acceptance of geopolitical risks: Investor confidence in the Baltic economy increased despite ongoing regional and global tensions.

“In 2024, the Baltic M&A market experienced a revival, demonstrating the region’s economic resilience and ability to attract investments even amid complex global conditions.” – according to Mergermarket analysts.

Top transactions by value:

1. Infortar (Estonia): The Estonian investment company Infortar acquired an additional 21.71% stake in the shipping company Tallink Grupp. Transaction value: approximately EUR 670 million;
2. Vinted (Lithuania): A secondary share sale of EUR 340 million increased the company’s valuation to EUR 5 billion;
3. Latvenergo (Latvia): Acquired 100% of Utilitas Wind’s “Telšiai” project, enabling wind energy production with a capacity of 124 MW by Q1 2026. Transaction value: approximately EUR 200 million;
4. Citycon (Estonia): As part of its asset divestment plan, Citycon sold the Kristiine Keskus shopping center in Tallinn to several Estonian investors for approximately EUR 129 million;
5. Latvijas Gāze (Latvia): Management’s share buyback continues as SIA Energy Investment repurchased 34% of Gazprom’s shares in Latvijas Gāze. While the transaction value is undisclosed, the previous 2023 buyback of a 28.97% stake from Marguerite Gas II was estimated at approximately EUR 111 million; and
6. Skeleton Technologies (Estonia): A consortium involving Siemens and Marubeni Corporation invested EUR 108 million in energy storage technologies.

Other notable transactions:

1. Printful and Printify Merger (Latvia): Established one of the largest personalized product printing platform operator;
2. Carguru (Latvia): The leading Latvian car-sharing company Carguru acquired the electric vehicle sharing startup OX Drive;
3. Elcogen Group plc (Estonia): Baker Hughes and Elcogen completed a funding round, securing EUR 140 million to develop leading solid oxide technology in the hydrogen sector;
4. Starship Technologies (Estonia): Raised EUR 90 million to advance autonomous delivery robot development;
5. Stargate Hydrogen (Estonia): Secured EUR 42 million for green hydrogen technology advancement;
6. Okidoki OU (Estonia): U.S.-based Metal Sky Star Acquisition Corporation acquired 100% of Okidoki OU shares for EUR 108 million;
7. Bite Latvia and Baltcom Merger (Latvia): Initiated in 2019 and concluded in 2024;
8. Green Genius UAB (Lithuania): The European Bank for Reconstruction and Development (EBRD) invested EUR 100 million to accelerate renewable energy projects;
9. ADB Gjensidige (Lithuania): Germany’s Muenchener Rückversicherungs AG and Norway’s Gjensidigestiftelsen acquired 100% of the company’s shares for EUR 80 million;
10. ERGO International AG: The ERGO Group’s international business manager finalized an agreement with Norwegian non-life insurer Gjensidige Forsikring ASA to acquire its Lithuania-based subsidiary ADB Gjensidige, including its branches in Latvia and Estonia;
11. FinBee Verslui (Lithuania): UK-based Pollen Street Capital acquired the company for EUR 35 million to strengthen its technology portfolio;
12. Merko Ehitus (Estonia): The Estonian construction firm Merko Ehitus announced the sale of its Latvian construction subsidiary Merks to Estonian firm Kose Männisalu;
13. GSMvalve (Estonia): The Estonian company GSMvalve, which owns the GPS logistics solutions provider Navirec, acquired the Latvian company Intelligent Systems SIA;
14. Latvenergo (Latvia): The acquisition of Laflora Energy foresees the construction of a significant wind power plant in Kaigu bog, Līvbērze parish. The planned 108.8 MW facility is set to start production in June 2026, with a total cost of EUR 185 million; and
15. Draugiem Group (Lithuania): Mapon strengthened its market position in Lithuania by acquiring 100% of the local fleet management solutions provider Trackon Fleet Management UAB.

Key transactions involving VILGERTS law firm:

1. Mobilly (Latvia): The VILGERTS’ team advised the investor and management team on the acquisition of this leading mobile payment solutions provider;
2. Adaptive Media (Latvia): The VILGERTS’ team provided legal support in the sale of this media and technology company to Merito Partners;
3. Stenders (Latvia): The VILGERTS’ team advised the management team and previous stakeholders in the sale of Stenders to investment company L Catterton; and
4. Lielvārds (Latvia): The VILGERTS’ team advised the Lithuanian educational publisher Šviesa on acquiring a 65% stake in Lielvārds.

Key M&A sectors in 2024

During 2024, three main sectors dominated the Latvian M&A market:

1. Energy sector

Significant developments include Latvenergo’s and other companies’ expansion into wind and solar energy portfolios across the Baltics. The European Energy project at the Tārgale solar park with a 148 MW capacity promises a substantial increase in solar energy production. Latvenergo launched nine solar parks in Latvia with a combined capacity of 65 MW and additional projects in Estonia and Lithuania. Plans for a 60 MW battery energy storage system aim to enhance the security of supply, while synchronization with the European continental grid, including a third connection with Estonia, is ongoing. Energy infrastructure development also highlights an interest in hydrogen, Power-to-X technologies, and biomethane integration into the national gas system.

2. Technology sector

The Latvian technology sector experienced growth in 2024 driven by innovation, market activity, and investor confidence. With around 500 active startups, key areas include fintech, health tech, mobile apps, deep tech, and AI. Government initiatives, such as startup visas and public research funds fostered growth. The war in Ukraine influenced tech applications, notably defence innovations. Companies like Global Wolf adapted products for military use, drone coalition development progressed, and local military tech production gained momentum. Notable deals included the Printful and Printify merger, Hyperjob raising EUR 435,000, Indemo reaching EUR 1.63 million in funding, and Digital Mind acquiring Poland’s EIP Dynamics.

3. Retail and consumer goods

M&A deals in this sector included AS Grenardi Group’s acquisition of SIA Julars (Goldlight brand), L Catterton’s majority stake acquisition in Stenders, and Virši-A’s expansion into Lithuania with its first gas station near Marijampolė. The opening of new Depo stores in Latvia and Lithuania reflects strong consumer demand for home improvement products, while new food retail developments signal positive investor sentiment in Latvia’s consumer goods sector.

The ongoing challenges within the Latvian M&A Market

A total percentage of 58% of transactions within the Baltics were below EUR 10 million, while in Latvia, the average transaction size ranged between EUR 2-5 million, indicating the market has not grown and has remained at its current size for a long time.

Baltic investors accounted for 40% of the transactions, while international investors focused on larger projects. Lithuania and Estonia continue to attract a larger volume of investments; however, there are hopes that with improvements to the LIAA strategy, Latvia will attract more investments.

Latvia continues to lag behind its neighbouring countries in terms of startup funding, attracting only 18% of the total capital in the Baltics. Nevertheless, 2024 showed positive trends:

1. Altum investments: Fifth-generation venture capital funds will invest EUR 100 million by 2030, with a focus on early-stage investments. Altum supported 335 science and technology companies, primarily in the IT and manufacturing sectors.
2. The SEB Baltic Venture Debt program: Introduced in the spring of 2024, offers companies growth financing of up to EUR 2 million without changes to shareholder structures.

During 2024, capital markets became more active, witnessing two major IPOs: Kalve Coffee raised EUR 1.16 million, and Eleving Group raised EUR 33 million. However, the anticipated AirBaltic IPO has yet to formally materialise and nor did state-owned and municipal enterprises enter the stock exchange in 2024.

Despite increasing scepticism regarding the so-called “green deal” and changes in US policies, the sustainability (ESG) factor has gained increasing importance.

During 2024, companies placed greater emphasis on sustainability issues:

1. 28% of transactions emphasised ESG aspects;
2. 26% of cases required changes in governance structures; and
3. 20% of transactions involved changes in the board or senior management.

Forecasts for 2025

Industry experts predict several trends for 2025:

1. An expected 10-15% increase in the number of transactions, particularly in the energy and TMT sectors;
2. Anticipated sales processes for Eco Baltia, Luminor, and Citadele, along with ownership structure changes in LMT and Tet, and the AirBaltic IPO;
3. The establishment of an artificial intelligence centre is expected to accelerate investments in the AI sector;
4. With the introduction of clearer crypto-asset regulations, tax relief for non-residents, and support for companies in this sector, Latvia’s position in the crypto industry is expected to strengthen; and
5. The defence tech and fintech sectors are expected to gain momentum.

Potential risk factors:

1. Tariff disputes and Russia’s geopolitical manoeuvres;
2. The potential return of high interest rates; and
3. A slowdown in global economic growth.

Conclusions

The year of 2024 demonstrated the Baltic region can attract investors despite global challenges. Although Latvia lags behind Lithuania and Estonia, it showed stable growth and resilience, particularly in the energy and technology sectors.

2025 could mark a turning point if the Baltic states successfully implement major infrastructure projects and continue to foster startup development. Investors will need to focus not only on traditional industries, but also on innovative solutions that will shape the Baltics’ competitiveness in the global market. The Baltic market will continue to consolidate, promoting the formation of stronger and more competitive companies in the region.

In Latvia, municipal elections will take place, potentially leading to political power shifts that may create some uncertainty, but also offer opportunities to alter the current stagnant economic environment. Limiting state expenditure, reducing bureaucracy, and focusing on key industries will be crucial. Sectors not prioritised may face challenges. State sector investments and support are undergoing a “reset”, and major projects such as Rail Baltica may be put on hold until the global economy recovers and Latvia’s GDP grows at a faster pace.