VIDEO: Fortum spins off Swedish electricity distribution business
Fortum completed the divestment of its Swedish electricity distribution business, which was announced on March 13
Fortum completed the divestment of its Swedish electricity distribution business, which was announced on March 13. The transaction has all the necessary regulatory approvals and the customary closing conditions have been met.
The total consideration from the divestment is $7.2 billion on a debt- and cash-free basis. Fortum will book a one-time sales gain of about $4.8 billion corresponding to close to $5.50 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 percent), Tredje AP-Fonden (AP 3) (20.0 percent), Swedish mutual insurance and pension savings company Folksam (17.5 percent) and the international infrastructure investor, Borealis Infrastructure Management Inc. (50 percent).
A total of about 400 employees will continue their work in the sold business. The electricity distribution to the about 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.