Apr 27 2017
Fortum and the City of Oslo have entered into an agreement to restructure their ownership in Hafslund ASA, one of the largest listed power groups in the Nordic region. The transactions are subject to approval by the Oslo City Council (Bystyret). The closing of the transactions is expected during the third quarter of 2017.
Fortum will sell its 34.1% stake in Hafslund ASA to the City of Oslo for approximately EUR 730 million.Fortum will acquire 100% of Hafslund’s current markets business area, which operates in Norway, Sweden and Finland. This will almost double Fortum’s number of electricity retail customers in the Nordics – from 1.3 million to 2.4 million.
Hafslund’s Heat business area and the City of Oslo’s waste-to-energy company Klemetsrudanlegget AS (KEA) will be combined into one company, forming an integrated value chain in the waste-to-energy system. Fortum will acquire 50% of the combined company. The combined entity will be owned 50/50 by Fortum and the City of Oslo, with Fortum having operational responsibility. Heat and KEA will be consolidated as a subsidiary to Fortum, with a 50% minority interest. Fortum has a similar arrangement with Stockholm stad in Sweden with a 590/50 ownership of the district heat operation in Stockholm.
Fortum will also acquire 10% of Hafslund’s current Production business area.
The total debt-free price of the acquisitions is approximately EUR 970 million.
The combined net cash investment of the transactions is expected to be approximately EUR 240 million.
“We are forming a strong partnership with the City of Oslo in areas where we can combine competences to drive innovation for a greener Oslo, one of Europe’s fastest growing urban areas. ,” says Pekka Lundmark, Fortum’s President and CEO.
“We are very pleased to have Fortum as our industrial partner in district heating and cooling and waste-to-energy. Together we will better be able to develop new technologies for sustainable and smart solutions for Oslo and its inhabitants,” says Raymond Johansen, Governing Mayor of Oslo.