Fortum has agreed to acquire the City of Oslo’s 53.7 % share of capital in Hafslund ASA for EUR 660 million (NOK 5.4 billion). On 9 May, the Oslo City Board (Byrådet) signed the agreement and recommended it to the City Council (Bystyret) for approval. With Hafslund, Fortum can take a major step in the development of the leading pan-Nordic power and heat company with significant skills and scale in Norway, Sweden and Finland. The transaction will contribute to stronger competition in the Norwegian market.


Together with Hafslund, Fortum will become the leading distribution and retail electricity company, both in the Nordic region and in Norway. It also strengthens Fortum’s number two Nordic position in power generation.


“I am delighted that we can continue to deliver on our pan-Nordic strategy, and that we have reached an agreement with the City board of Oslo. We are an owner with strong industrial competence and financial resources to develop Hafslund’s business in Norway and beyond”, says Mikael Lilius, President and CEO of Fortum.


Fortum has a strong track record when it comes to bringing industrial and professional skills to all its operations.


“Hafslund is a fine company with a long history and strong market position. It fits excellent into our strategy. Together we can combine key skills in a way that will enhance our competitiveness not only in Norway, but in all Nordic markets. With this transaction we can continue to leverage skills and experience in our Nordic organization to the long term benefit of customers, employees and owners”, Mikael Lilius concluded.


The transaction remains subject to approval by Oslo City Council and that there are no higher offers prior to early July. The transaction is expected to close during the summer after which Fortum will launch a mandatory tender offer to the remaining minority shareholders at the same price.


Transaction overview


Fortum has agreed to acquire City of Oslo’s 67,524,647 A-shares and 37,342,907 B-shares in Hafslund ASA at a cash price of NOK 53.0 for A-shares and NOK 48.0 for B-shares for a total of EUR 660 million (NOK 5.4 billion).


Fortum’s total acquisition price for 100% of Hafslund will be NOK 45.4 per share (EUR 1.1 billion or NOK 8.9 billion) including the price paid for Fortum’s existing 34.1% holding in Hafslund and the price to be paid to remaining minority shareholders. In addition, Fortum will assume EUR 1.4 billion (NOK 10.9 billion) of net financial debt.


The transaction increases stable cash flows from distribution activities, creates a larger customer base and broader geographic scope.





The combination of Hafslund and Fortum, and the integration of Fortum’s existing Norwegian assets with Hafslund, will create significant business opportunities and are also expected to generate EUR 20 million of annual synergy benefits by 2006. The synergy benefits will be realised through the sharing of best practices in operation and maintenance, economies of scale (e.g. combined purchasing) and combination of competencies.

Due to Norwegian regulations governing ownership of hydroelectric assets, Fortum will initially through the agreement with City of Oslo and the tender offer acquire shares resulting in an aggregate ownership of 89.9% of Hafslund. The acquisition of the remaining City of Oslo shares remains subject to obtaining an exemption from the regulatory concession requirement. If such exemption is not granted, City of Oslo will remain a minority shareholder in the hydroelectricity generation business while Fortum will fully own all the remaining assets and operations of Hafslund.


Invitation to press conference in Oslo and Espoo


Fortum will arrange a press conference in relation to the announcement today at 12 am Finnish time at its head office in Keilaniemi, Espoo, and simultaneously at 11 am Norwegian time in Oslo at Teatersalen, Hotel Continental. Fortum’s President and CEO Mikael Lilius will be present at the Norwegian press conference.




Hafslund is the largest power company in Norway in terms of electricity distribution and sales with 540,000 electricity distribution customer connections and 614,000 retail customers. Hafslund also has 9 hydroelectric generation stations, which produce a total of 2.9 TWh in a normal year. For the 12 months ending 31 March 2004, Hafslund had sales of NOK 8.1 billion and operating profit of NOK 727 million.




Fortum is a leading energy company in the Nordic countries and the other parts of the Baltic Rim. Fortum’s activities cover the generation, distribution and sale of electricity and heat, the production, refining and marketing of oil, the operation and maintenance of power plants as well as energy-related services. The main products are electricity, heat and steam, traffic fuels and heating oils.

For the 12 months ending 31 March 2004, Fortum's net sales totalled EUR 10.6 billion and operating profit stood at EUR 1.5 billion. The average number of employees 2003 was 13,300. Fortum's shares are quoted on the Helsinki Exchanges.



Fortum Corporation

Carola Teir-Lehtinen
Senior Vice President, Corporate Communications

For further information please contact

Mikael Lilius, President & Chief Executive Officer                                      +358 10 452 9100


Carola Teir-Lehtinen,
Senior Vice President, Corporate Communications                                    +358 50 452 4118


Helsinki Exchanges
Key media