In April, the Italian corporation Marcegaglia announced the acquisition of the Latvian unit of the Russian steel producer Severstal. The deal was made possible after obtaining approval from the Latvian government and the European Union competition authorities, Marcegaglia said in the statement. Last year, Severstal was sanctioned and its European operations were suspended. The Italian company plans to set up a modern processing and distribution centre in Latvia, with 300 new workplaces.
"We are very pleased with this deal. It has helped us to strengthen our commercial presence in Northern Europe and the Baltic states, a region where we have not been present before, thus revitalising our European operations, especially in Latvia and, respectively, in Poland and Ukraine,” says Antonio Marcegaglia, President and CEO of Marcegaglia Steel. “Last February, after a thorough review of the dossier, the Latvian government welcomed our Group's plans to acquire this company, recognising its revitalisation potential. We plan to resume operations very soon. We are delighted to have invested in Latvia and we are confident that our cooperation will continue to deliver great results in the future,” said Antonio Marcegaglia, president and CEO of the company.
The deal between Marcegaglia and Severstal was a complex one, involving many institutions other than the Investment and Development Agency of Latvia (LIAA). “This is an example of how we can achieve results by agreeing on a common goal. Otherwise, we would have to live with frozen assets and unclear legal status for a long time. We are pleased with the active involvement of Latvian state institutions and the EU in addressing such issues,” said Kaspars Rožkalns, Director General at LIAA.
The implementation of the project required prompt action and cooperation from Latvian state institutions – in particular the Ministry of Economics, the Ministry of Foreign Affairs, the Embassy of the Republic of Latvia in Rome, the Financial and Capital Market Commission, Latvian security authorities and the Prime Minister's Office. “Although at times the project did not go smoothly due to different approaches and interpretations, the cooperation resulted in decisions that made the deal possible,” says Guntis Rubīns, head of the LIAA office in Italy.
Rubīns also notes the ability of the Italian government and its Delegation to the European Commission to obtain the agreement of EU Member States to extend twice the deadline for the acquisition of the assets of the sanctioned companies, as well as the determination of the owners of the Italian company Marcegaglia to conclude the deal, doing everything possible on their part. He also notes that the advice and support provided by Valdis Dombrovskis' office in clarifying the procedures and agendas of the Brussels institutions to decide on the necessary steps to move forward with the deal was valuable.
The cooperation of all parties involved was important for the success of the deal. The Embassy of Italy in Latvia was also involved in the process. “The investment by the Marcegaglia Group in Riga marks a change of pace in the Italian industrial presence in Latvia. We consider it a success for Italy as a whole and a bright example of what Rome and Riga are able to achieve when they work together, including at the European Union level,” said Italian Ambassador to Latvia H.E. Alessandro Monti.
The head of the LIAA office in Italy believes that this project opens a new chapter in the economic relations between Latvia and Italy, first of all because of the scale of the project and Marcegaglia's plans to increase the turnover of the newly established company Marcegaglia Baltics SIA to EUR 300 million in 3 years. The implementation of such projects will also encourage other Italian entrepreneurs to look at Latvia, given the reputation and visibility of Marcegaglia's owners in Italian business and political circles. This project also demonstrates Latvia's deepening integration into the Western world, which is particularly important when trying to reduce any dependence on Russian influence, at a time when it is blatantly ignoring the sovereignty of neighbouring countries and trying to destroy Ukraine's existence as a state,” said Rubīns.
For more information on economic cooperation between Latvia and Italy, please contact Guntis Rubīns, head of the LIAA office in Italy: Guntis.Rubins@liaa.gov.lv.