Fortum has agreed to sell its electricity distribution business in Finland to Suomi Power Networks, which is owned by a consortium of Finnish pension funds Keva (12.5%) and LocalTapiola Pension (7.5%) together with international infrastructure investors First State Investments (40%) and Borealis Infrastructure (40%). The total consideration is €2.55bn 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's electricity distribution business in Finland includes two jointly managed grid companies: Fortum Espoo Distribution, with grids in the city of Espoo and surrounding communities and the city of Joensuu, as well as Fortum Sähkönsiirto, 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 km delivering approximately 12.6 TWh of electricity to customers. Fortum's market share of the local electricity distribution in Finland is approximately 20%.