Ørsted has signed an agreement to divest its Danish residential customer business, as well as its power distribution (Radius) and City Light businesses to SEAS-NVE for a price of DKK 21.3 billion on a cash and debt-free basis.

The residential customer business sells electricity to approximately 717,000 customers, gas to approximately 105,000 customers, and has approximately 44,000 heat customers.

The agreement has been entered into following an unsolicited, non-binding offer which Ørsted received from SEAS-NVE in the second half of June 2019.

The agreement follows the decision made in June 2018 by Ørsted’s Board of Directors and Executive Management that Ørsted is not the best long term-owner of these businesses. The decision led Ørsted to initiate a structured divestment process for these businesses in autumn 2018. In January 2019, this divestment process was discontinued as the political support required to continue the process was no longer there.

"Ørsted’s strategic ambition of becoming a global leader in green energy and the company’s significant expansion of renewable energy production would further reduce the strategic and financial importance of the Danish downstream business in the coming years," the company said

Henrik Poulsen, CEO and President of Ørsted, said: “With Ørsted’s global expansion in renewable energy, we’re no longer the right owner of Radius and the Danish residential customer and City Light businesses. We’re therefore happy to enter into an agreement with SEAS-NVE, which is Denmark’s second largest cooperatively-owned energy company, to buy these businesses. The agreement ensures an attractive transaction for Ørsted’s shareholders and provides a good future home for the customers and for our highly skilled employees. We’ll use the proceeds from the divestment to continue our global investments in green energy.”

The transaction is subject to regulatory approvals by the competition authorities and the Danish Energy Agency. Closing of the transaction is expected to take place in first half of 2020.

At closing, Ørsted expects the transaction to result in a gain on divestment of enterprises (not part of EBITDA) of DKK 11-12 billion, depending on capital employed on the day of closing.

Tags:
Ørsted   M&A   Europe  

Comment on this story


ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com
Sr-Market-Risk-Analyst -- Wholesale Supplier/Trader -- New York - New York City Metro
Energy-Regulatory-Specialist -- Other -- Other
More Stories on RetailEnergyX.com:
FT: Mitsubishi-Backed Retail Supplier 'Prepares Bid' For International Retail Supplier With U.S. Arm
Shell Acquiring 250,000 Customers From U.K. Supplier;' Octopus Acquiring 580,000 Customers
UK Retail Supplier With US Affiliate In Talks To Secure 'New Funding'; Wholesale Prices Challenge
NRG To Trim Costs, Reviews Retail Pricing Structure After Direct Energy Acquisition '
PSEG to Acquire 25% Ownership Interest in Ocean Wind