A group comprised of Borealis Infrastructure Management Inc, Tredje AP-Fonden, Första AP-Fonden and Folksam has agreed to acquire Fortum Distribution AB, an electricity distribution provider in Sweden. No financial terms were disclosed for the transaction that is expected to be completed in the second quarter of this year.
TORONTO, ONTARIO–(Marketwired – March 13, 2015) – A consortium consisting of Borealis Infrastructure Management Inc, Tredje AP-Fonden (“AP3”), Första AP-Fonden (“AP1”) and Folksam with subsidiaries (the “Consortium”) has signed today an agreement to acquire 100% of the shares of Fortum Distribution AB, Fortum’s electricity distribution networks in Sweden.
Fortum Distribution AB is the second largest player in the electricity distribution market in Sweden. The company distributes electricity to approximately 900,000 customers, representing a market share of around 17 per cent, based on number of connections.
With the acquisition, Fortum Distribution AB will have new long-term, stable and supportive owners. The Consortium will continue to develop the Swedish electricity grid in order to safeguard reliable electricity distribution in the best interest of customers.
“On behalf of Borealis Infrastructure, we are very pleased to announce our first investment in Sweden alongside like-minded, long-term Swedish investors. Sweden’s strong regulatory framework and firm commitment to the rule of law make it an ideal place to invest. Fortum Distribution AB provides a strong match for OMERS long-term obligations to our plan members, and represents precisely the kind of rare, high-quality asset that fits squarely with OMERS strategy to increase its exposure to infrastructure,” said Michael Rolland, Chief Investment Officer, OMERS Private Markets (Infrastructure and Private Equity).
The ownership shares in the Consortium are: Borealis Infrastructure – 50.0 per cent, AP1 – 12.5 per cent, AP3 – 20.0 per cent and Folksam with subsidiaries – 17.5 per cent. Completion of the transaction is expected during the second quarter of 2015. The acquisition is subject to customary regulatory approvals.
OMERS Private Markets
OMERS Private Markets (Borealis Infrastructure and OMERS Private Equity) manages CAD$19.4 billion in equity capital on behalf of the OMERS pension plan. OPM invests globally in infrastructure and private equity assets. Investments are aimed at generating superior, risk-adjusted returns to help deliver strong and sustainable pensions to OMERS members. OPM’s diversified portfolio of large-scale infrastructure assets exhibits stability and strong cash flows, in sectors including energy, transportation and government-regulated services. OPM has offices in Toronto, New York, London and Sydney. OMERS is one of Canada’s largest pension funds with net assets of CAD$72 billion and an AAA credit rating. For more information, please visit www.borealis.ca or www.omers.com.
The Third Swedish National Pension Fund (AP3) is one of five buffer funds – known as AP funds – within the Swedish pension system. Together, the five funds hold around 13% of Sweden’s income pension system assets. AP3’s fund capital totaled SEK 288,332 million at 31 December 2014. The Fund paid SEK 5,120 to the Swedish Pensions Agency during the year to cover the deficit between pension contributions and liabilities. See www.ap3.se for further information about AP3’s mission, our asset management operations and our role as an institutional shareholder.
Folksam with subsidiaries
Folksam is a mutual company. We offer insurance and pension savings. Nearly one out of two Swedes are insured by Folksam and we are one of Sweden’s largest asset managers with more than SEK 350 billion under management. Our vision is for our customers to feel secure in a sustainable world. For more information, please visit www.folksam.se.
Första AP-fonden is one of five AP funds in the Swedish national income pension system. The capital reserves in the AP funds ensure that pension benefits can be paid even when disbursements from the pension system exceed contributions into it. Första AP-fonden has assets under management of SEK 284 billion (31 Dec. 2014) in a global portfolio comprising equities, fixed income securities, real estate, private equity funds and hedge funds. Första AP-fonden invests to achieve high and long-term sustainable return. More information about Första AP-fonden at www.ap1.se.