Scandinavian utility Fortum has closed the previously announced divestment of its Swedish electricity distribution business to an investor group that includes Borealis Infrastructure, the infrastructure investment arm of the Ontario Municipal Employees Retirement System (OMERS), and several Swedish pension funds. The total consideration was about 6.5 billion euros (US$7.1 billion). As a result of the transaction, Borealis holds approximately 50 percent of the business.
Fortum completes divestment of its Swedish electricity distribution business
June 01, 2015
Fortum has today completed the divestment of its Swedish electricity distribution business, which was announced on 13 March 2015. The transaction has all the necessary regulatory approvals and the customary closing conditions have been met.
The total consideration from the divestment is SEK 60.6 billion on a debt- and cash-free basis (corresponding to approximately EUR 6.5 billion). Fortum will book a one-time sales gain of approximately EUR 4.3 billion corresponding to close to EUR 5 per share. The final sales gain will be reported as part of the second quarter 2015 results of the discontinued operations. Distribution segment has been presented as discontinued operations since the first quarter of 2015.
The new owner of the Swedish distribution business is a consortium comprising Swedish national pension funds Första AP-Fonden (AP 1) (12.5%), Tredje AP-Fonden (AP 3) (20.0%), Swedish mutual insurance and pension savings company Folksam (17.5%) and the international infrastructure investor, Borealis Infrastructure Management Inc. (50%). A total of approximately 400 employees will continue their work in the sold business. The electricity distribution to the approximately 908,000 customers will also continue without disruption upon closing.
Upon the closing of the transaction, Fortum completes the divestment process of its distribution businesses in Sweden, Norway and Finland. The divestment process started in December 2013, when Fortum concluded a strategic assessment of the future alternatives for the distribution business. After the distribution divestment, Fortum will focus in line with its strategy on CO2-free hydro and nuclear power production and efficient combined heat and power generations as well as electricity sales and the development of related services to its customers.
Senior Vice President, Corporate Communications
Senior Vice President, Corporate Communications, tel. +358 10 45 20480
Communications contact also:
Fortum Media Desk, tel. +358 40 198 2843
Analysts and investors:
Sophie Jolly, Vice President, Investor Relations, tel. +358 10 45 32552
Fortum’s purpose is to create energy that improves life for present and future generations. Fortum’s expertise is in CO2-free and efficient electricity and heat production. The company also offers energy-related products and expert services to private and industrial customers and energy producers. Fortum’s main areas of operation are the Nordic and the Baltic countries, Russia and Poland. In 2014, the annual sales (excluding the divested electricity distribution business) totalled EUR 4.1 billion, and comparable operating profit was EUR 1.1 billion. The company employs approximately 8,400 people. Fortum’s share is listed on Nasdaq Helsinki. http://www.fortum.com
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