Ørsted has agreed to divest its Danish power distribution (Radius), residential customer and City Light businesses to SEAS-NVE, adding £2.5 billion (DKK 21.3 billion) to its war chest for further expansion.
The Danish company has investments in eleven UK offshore wind farms, including Hornsea 2, set to be the world’s largest. Announcing the diversment, Ørsted highlighted its “strategic ambition of becoming a global leader in green energy and the company’s significant expansion of renewable energy production”, which it said would further reduce the strategic and financial importance of the Danish downstream business. It first decided to sell the downstream business in June 2018 bit the divestment was halted in January this year. The company said, “the political support required to continue the process was no longer there”. But Ørstedsaid it received the unsolicited, non-binding offer from SEAS-NVE in the second half of June.
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. It is expected to close in the first half of 2020.
Danske Bank and Citigroup acted as financial advisers to Ørsted in connection with the transaction.