reede, november 28, 2008

for sweden ... in time

SAS wants to buy the Estonian government's remaining 34-percent stake in Estonian Air, the national air carrier. And the Estonians are considering the sale. According to Prime Minister Ansip, the airline "lacks vision" and is not worth another round of state financing.

It is not unbelievable that the deal will be done. I had once suspected that when the Estonian well ran dry for Scandinavian companies, they would hand the firms over to someone bigger -- the Germans or the Russians -- and head for warmer climes.

The truth , though, is that in the current global financial situation, there are no hotter places to invest. And the Scandinavian firms have pumped so much money into the Estonian economy that they are more likely to wait out the current recession for a time when their investment is returned.

If Estonian Air turns into SAS Estland, then it will follow the trend of Scandinavian owners taking more direct and visual control over their Baltic subsidiaries. When I first moved to Estonia in 2003, I could have strolled down to central Tallinn and enlisted to services of Estonia's two largest banks, Hansapank and Eesti Ühispank, to hold my money.

At that time, those banks were owned by Nordic companies -- Swedbank and SEB, respectively, but as of this autumn both companies have been remade in the images of their parent. Hansapank became Swedbank in autumn -- a sign of the bank's commitment to the market, said outgoing CEO Jan Liden, and I am personally unsure of just when Ühispank morphed into "Skandinaviska Enskilda Banken."

The other day we were dispatched to Ühispank in downtown Tartu only to find no trace of of the company. In its place was SEB instead. Even inside of SEB I had a hard time finding anything on it that said "Ühispank." And I have made the switch to speaking of "Swedbank," rather than "Hansapank," with little effort. Those around me speak of "SEB," pronounced "se-beh" in Estonian, as if it had always existed.

I am interested to see how this latest round of Swedification develops. Some reports say the government is inclined to sell, others say that it is inclined to buy SAS out. Either way, 2008 has seen a significant change in the domestic marketplace. The old brands are no longer there, and the presence of the "new boss" in the Estonian economy is evermore apparent.

10 kommentaari:

Aleks ütles ...

I find it difficult to switch and I continue to call my bank, Hansabanka instead of Swedbank.

Estonians are right to talk with SAS about Estonian Air. I wish the Latvian government did the same when there was an opportunity, instead of asking IMF for money. Now they've upset SAS that it threatens to sell its stake in airBaltic to some other buyer (a Russian, perhaps?) instead of fully investing into the airline.

AndresS ütles ...

Why wouldn't they sell? This is a liberal economic government with declining tax revenue. You'd think privatizing EA would be a natural choice for them.

Unknown ütles ...

Hmm.. this is a tough call but I still believe that money has a nation. And the Estonians are just dumb for not acknowledging it. But maybe I'm just biased because I've grown up and seen every single good thing we have accomplished being sold to someone else to incorporate in a large pool of big corporation nothingness.

Giustino ütles ...

The argument against, as I have read it, is that SAS will make you fly through Copenhagen or Stockholm to get to Tallinn.

Juan Manuel ütles ...

In a time where nobody trusts anybody in the banking sector, a company that spells "bank" with a "p" looked funny to say the least ;)

LPR ütles ...

So it is over with hansapunks.

Kristopher ütles ...

How the hell do you pronounce Swedbank anyway? Like sweat, suede or Swede? And is it the same in Estonian?

martintg ütles ...

As it has turned out, Swedish ownership of these banks have benefited Estonia, particularly in this current financial crisis. Look what happened to Parex Bank in Latvia. I read some where Swedish banks are rated second or third in the world in terms of financial soundness.

Arguments like "The Estonian government has no business owning an airline" seem rather hollow when one realises that 50% of SAS is owned by the Swedish, Danish and Norwegian governments.

I read somewhere that SAS are in financial trouble themselves, so it is highly likely SAS will force you to fly via Stockholm if they take over Estonian Air as a way of rationalising their services.

Talking about business news, have you guys checked out this site:
Some interesting articles, but unfortunately the forum is infested by a handful of really appalling estophobes.

Giustino ütles ...

Kristopher, I say it like "suede" but with a "v."

Martin, yeah those guys in the comments section of BBN are annoying. Particularly annoying are the Western Europeans.

I love it when Dutch or French or Brits criticize Estonians about their "integration problems."

I mean hello. Please, wake up. Take a look around!

GF ütles ...

Government should sell, it is not their job to run an airline company.
Regarding your previous comment "The argument against, as I have read it, is that SAS will make you fly through Copenhagen or Stockholm to get to Tallinn."
Isn't it already the case? To go to Paris, I have no choice as the direct flights with EA are from March to October only; and most of the time the direct trip is way too expensive -even compared to SAS or Finnair.