Estonia_s MicroLink and Latvia_s Fortech announced their merger on Jan. 27 creating the largest information technology concern in the Baltics.

The two Baltic computer companies expect that the merger will make the $500 million per year regional IT market more competitive: boosting sales and establishing a formidable hold in computer manufacturing, software production and the Internet. Before the Latvian acquisition, MicroLink forecasted an annual turnover for this year around $40 million. The company now predicts the 2000 turnover will be over $70 million. Fortech had sales of $20 million in 1999. Just south of Europe_s so-called Silicon Valley, which boasts IT sales over $1 billion, the Baltic states have been encouraged by foreign investors to create bigger firms that can rival their Nordic neighbors. Cheaper costs, proximity to Western Europe and strong human resources as well as future accession into the European Union are reasons that the three republics have strong potential in the high-tech industry and are attractive to investors. The Baltic IT giant will have about 900 employees and be managed by a joint team. The companies will keep their business names. MicroLink operates two factories in Riga and Tallinn that account for about 30 percent of regional computer manufacturing. Nearly half of these computers are sold in Latvia and Estonia.