Finnish energy utility Fortum has reached an agreement with the City of Oslo (Norway) to restructure their ownership in Hafslund, the largest electricity distribution company in Norway, with 700,000 customers in 2016 (18% of the connection points).
Fortum will sell its 34.1% stake in Hafslund ASA to the City of Oslo for approximately €730m and will in turn 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. In addition, Hafslund’s Heat business area and the City of Oslo’s waste-to-energy company
Klemetsrudanlegget AS (KEA) will be combined into one company, in which Fortum will acquire 50% (50% owned by the city of Oslo) and operational responsibility). Heat and KEA will be consolidated as a subsidiary to Fortum, with a 50% minority interest. Finally, Fortum will acquire 10% of Hafslund’s current Production business area.
The transactions, worth around €970m, are subject to approval by the Oslo City Council (Bystyret), the necessary regulatory approvals and fulfilment of the customary closing conditions. The closing of the transactions is expected during the third quarter of 2017.