Finnish energy company Fortum has agreed to sell its electricity distribution business in Finland to Suomi Power Networks Oy.
Suomi Power Networks is owned by a consortium of Finnish pension funds Keva and LocalTapiola Pension together with international infrastructure investors First State Investments and Borealis Infrastructure.
According to Fortum’s press release, the total consideration is EUR 2.55 billion on a debt- and cash-free basis. Fortum expects to complete the divestment process during the first quarter of 2014 subject to the necessary regulatory approvals as well as customary closing conditions.
Fortum expects to book a one-time sales gain of EUR 1.8-1.9 billion corresponding to approximately EUR 2.0 per share in its Electricity Distribution and Sales Division’s first quarter 2014 results. A total of 320 employees will transfer with the business at closing with existing terms of employment.
Fortum’s decision to divest its electricity distribution business has no effect as such on its approximately 640,000 distribution customers. Upon closing, the customers will transfer with the business with existing terms.
The decision to divest Fortum’s electricity distribution business in Finland is linked to the strategic assessment of the company’s electricity distribution business’ future alternatives.
The company also prepares for a possible sale of the Swedish and Norwegian electricity distribution businesses. The decision to complete the process is dependent on market development and development of national regulation in both countries, among others.
Fortum’s electricity distribution business in Finland includes two jointly managed grid companies: Fortum Espoo Distribution Oy, with grids in the city of Espoo and surrounding communities and the city of Joensuu, as well as Fortum Sähkönsiirto Oy, with several grid areas located mainly in southern and western Finland, but also in the north-western part of the country.
The combined network length of the companies is 79,000 kilometres delivering approximately 12.6 terawatt-hours of electricity to customers, Fortum says. Fortum’s market share of the local electricity distribution in Finland is approximately 20%.
Fortum’s activities cover the generation, distribution and sales of electricity and heat as well as related expert services.
Fortum’s operations focus on the Nordic countries, Russia, Poland and the Baltics. In 2012, Fortum’s sales totalled EUR 6.2 billion and comparable operating profit was EUR 1.7 billion. The company employ approximately 10,400 people. Fortum’s shares are quoted on NASDAQ OMX Helsinki.
Source: www.fortum.com
