Eurasia Review
Summary
Fortum said Friday it has signed an agreement to sell its district heating business in the Baltics to Partners Group, a leading global private markets firm, acting on behalf of its clients. The total consideration on a debt- and cash-free basis is EUR 800 million. Fortum expects to record a tax exempt capital gain of approximately EUR 240 million in the City Solutions segment’s second-quarter 2021 results. The transaction is subject to customary closing conditions and is expected to be completed in the second quarter of 2021.
The transaction is a continuation of Fortum’s strategy execution, whereby Fortum continuously reviews its businesses to optimise its portfolio for value creation. In June 2019, Fortum announced it considered the strategic options for its district heating businesses in Estonia and in February 2020, Fortum announced it would review the district heating businesses in the other Baltic countries.
In 2020, Fortum divested the district heating businesses in Joensuu and Järvenpää, in Finland. The strategic reviews of the heating and cooling businesses in Poland, its 50% stake in Stockholm Exergi, and the Consumer Solutions business are currently ongoing.
“The divestment is in line with our portfolio optimisation and follows our successful divestments in Finland in 2020. The assets raised large interest among buyers as the business transformation to lower carbon intensity for these assets has largely been done,” says Per Langer, Executive Vice President, City Solutions at Fortum.
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#News
#DistrictHeating
#Baltics