The ownership shares in the consortium are: Borealis Infrastructure, 50.0 per cent, Första AP-Fonden (AP1), 12.5 per cent, Tredje AP-Fonden (AP3), 20.0 per cent and Folksam with subsidiaries, 17.5 per cent. The consortium beat out competition from the other bidder, a team composed by Goldman Sachs Group Inc.’s infrastructure arm, 3i Group ‘s infrastructure arm and sovereign wealth funds.
Fortum Distribution AB is the second largest player in the electricity distribution market in Sweden. The company distributes electricity to approximately 900,000 customers, representing a market share of around 17 per cent, based on number of connections.
The consortium will continue to develop the Swedish electricity grid in order to safeguard reliable electricity distribution in the best interest of customers.
According to sources, the transaction is valued at about €6 billion (US$6.3 billion). Fortum has plans to use the funds to cut debt and focus on power generation and renewable energy.
Michael Rolland, Chief Investment Officer, OMERS Private Markets (Borealis Infrastructure and OMERS Private Equity), stated:
“On behalf of Borealis Infrastructure, we are very pleased to announce our first investment in Sweden alongside like-minded, long-term Swedish investors. Sweden’s strong regulatory framework and firm commitment to the rule of law make it an ideal place to invest. Fortum Distribution AB provides a strong match for OMERS long-term obligations to our plan members, and represents precisely the kind of rare, high-quality asset that fits squarely with OMERS strategy to increase its exposure to infrastructure.”
Completion of the transaction is expected during the second quarter of 2015. The acquisition is subject to customary regulatory approvals.
We have recently reported about several M&A transactions: