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UPDATE 1-Finland's Fortum to buy Hafslund operations for $262 million
April 26, 2017 / 8:06 AM / 8 months ago

UPDATE 1-Finland's Fortum to buy Hafslund operations for $262 million

(Adds background, detail, CEO quote)

HELSINKI, April 26 (Reuters) - Finnish utility Fortum will almost double its tally of retail electricity customers in the Nordics as part of a 240 million euro ($262 million) investment involving Norwegian power group Hafslund .

Fortum said it will sell its 34.1 percent stake in Hafslund to the city of Oslo for about 730 million euros, and that it would then buy Hafslund’s Markets business area and stakes in other businesses worth in total about 970 million euros.

The deal will take the number of Fortum’s electricity retail customers in the Nordic countries to 2.4 million from 1.3 million.

Fortum has been looking for mergers and acquisitions for years following its 9.3 billion euro divestment of power distribution grids, but it has so far announced only relatively small investments.

“In electricity retail, the combination of Hafslund and Fortum will have significant scale benefits,” Fortum Chief Executive Pekka Lundmark said in a statement.

“Our strategy implementation will continue and we still have significant financial headroom available for market consolidation,” he added.

Fortum has said that it aims to spend a couple of billion euros quickly in Europe’s power generation and “city solutions” assets, including waste-to-energy and biomass business.

In an interview with Reuters in March, Lundmark said Fortum still aims for a deal in 2017 and that consolidation in Europe’s power generation was the company’s first priority.

Polish newspaper Puls Biznesu reported on Tuesday that Fortum was in deal talks with a Polish gas company PGNiG . Fortum declined to comment. ($1 = 0.9168 euros) (Reporting by Jussi Rosendahl and Tuomas Forsell; Editing by Keith Weir)

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