Danish offshore wind giant and power company Ørsted has finally completed the long-awaited divestment of its Danish power distribution, residential customer, and City Light businesses to customer-owned Danish energy company SEAS-NVE for a price of DKK 21.3 billion (US$3.14 billion).
Ørsted has been transitioning its business priorities for over two years now, going back to its decision to divest its oil & gas business in September 2017 and which led to it promptly changing its name from DONG Energy. As part of the company’s intention to focus more on renewable energy, and offshore wind in particular, the company has been seeking to sell off its Danish power distribution and residential customer business. However, these plans were undermined in early 2019 and subsequently halted by the Danish Ministry of Finance which raised concerns over the planned divestment. As the company explained last week, the decision was made in 2018 by Ørsted’s Board of Directors and Executive Management who believed that Ørsted was not the best long term-owner of these businesses.
Fast-forward to last week, however, and Ørsted announced that it had signed an agreement its Danish power distribution, residential customer, and City Light businesses to SEAS-NVE for a price of DKK 21.3 billion on a cash and debt-free basis, with the proceeds of the transaction to be paid in cash upon closing. Ørsted received the unsolicited, non-binding offer in the second half of June 2019.
“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,” said Henrik Poulsen, CEO and President of Ørsted. “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.”
As always, the transaction is subject to regulatory approvals by the competition authorities and the Danish Energy Agency, but as it stands, Ørsted expects to close the transaction in the first half of 2020.
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