Stock exchange release


17 January 2005, 10:17 EET


Due to technical problems in the information systems of the Helsinki Stock
Exchange, Fortum's stock exchange release issued earlier today contained errors.

Below is the correct text.

Fortum Corporation        STOCK EXCHANGE RELEASE
                         17 January 2005                     1 (3)

- Additional purchase offer to the City of Espoo

Fortum's Board of Directors decided on 17 January 2005 to use the call option to
buy all shares of E.ON Finland owned by the German E.ON Group. The call option is
part of the compensation Fortum received from the Wesertal deal made with E.ON in
2002. The shares to be acquired from E.ON constitute about 65.6 percent of the
share capital and votes of E.ON Finland.

According to the contract Fortum has the option to buy shares during three months
from the beginning of 2005 at a price of about EUR 38 per share. The total value
of the purchase is about EUR 390 million. The exact purchase price depends on the
net result and dividend distribution of E.ON Finland for the year 2004.

The board of Fortum also decided to make a purchase offer to the City of Espoo,
which is the largest minority shareholder of E.ON Finland with a share of
approximately 34.2 percent. The offered price is EUR 48 per share, which is about
52 percent more than the last closing rate of E.ON Finland and about 62 percent
more than its volume weighted average share price last year. When the offer of
Fortum is approved, Fortum will pay to the City of Espoo about EUR 257 million in

If Fortum's share of the share capital and votes of E.ON Finland exceeds 90
percent as a result of the offer, Fortum will offer to redeem the shares of other
shareholders at the same price as in the purchase offer to the City of Espoo.

When the transactions have been realized, Fortum plans to develop the operation
of E.ON Finland e.g. by investing about EUR 300 million into expanding its main
power plant in Suomenoja, Espoo and increasing the power generation capacity
significantly to almost 400 megawatts. The solution based on using natural gas
will markedly reduce the emissions of the power plant.

The transactions mean significant expansion of Fortum's operation in its home
town Espoo, which is E.ON Finland's main operating area. Because of the
relatively dense population structure of Espoo, Fortum will keep the operating
area of E.ON Finland as a separate pricing area for electricity distribution as
defined in the Electricity Market Act. The purchases will not affect the
distribution prices of E.ON Finland during the next two years but will remain at
the same level as at the end of 2004.

Fortum already employs about 1,400 persons in Espoo and is one of the largest
employers of this city. As the importance of Espoo grows for Fortum, it estimates
that a total of about 100 positions in its different operations will move from
other areas to Espoo.

Fortum will finance the purchase by debt financing using its existing credit
arrangements. As the purchases are realized, the net debt of Fortum will grow by
about EUR 650 million and the debt-equity ratio of Fortum will rise by about
eight percent points to 81 percent from the level according to the interim
financial statements at the end of September. Fortum estimates that the purchase
will have a positive effect on the earnings per share of Fortum within two years.

According to Mikael Lilius, CEO of Fortum, E.ON Finland fits well to the strategy
of Fortum, which aims at growth and success in the power market that has already
integrated into a common Nordic market and will soon become a common European
market. "As the market opens up, competition will become tighter. Together E.ON
Finland and Fortum can efficiently seize the opportunities offered by the new
market conditions. For the future of Espoo's electricity business and the people
of the area it is important to have an active Finnish company that is able to
compete in this expanding market," says Mr Lilius.

A press conference for the media and analysts will be arranged on 17 January 2005
at 10.30 a.m. at Fortum's head office, Keilaniementie 1, Espoo. An international
conference call for analysts and investors will be arranged at 4.00 pm (GMT +2).
The telephone number is +44(0)20 7784 1020 (if calling from Europe) or +1 718 354
1157 (if calling from the US).

Fortum Corporation
Carola Teir-Lehtinen
Senior Vice President, Communications

Further information:
Tapio Kuula, President, Power and Heat sector, tel. +358 10 452 4112
Carola Teir-Lehtinen, Senior Vice President, Communications, tel. +10 452 4118

Helsinki Stock Exchange
Key media


Earlier events

Espoon Sähkö went public on Helsinki Stock Exchange in 1994. In this connection
the ownership of the City of Espoo decreased to approximately 74%. In addition,
the City of Espoo sold approximately six percent of the shares on the stock
exchange in 1996.

In 1999 Länsivoima acquired approximately 28% of shares in Espoon Sähkö.
Länsivoima was merged with Fortum in 2000, and Fortum became a shareholder of
Espoon Sähkö.

In September 2001 the City of Espoo and the German power Group E.ON signed a sale
and shareholders' agreement according to which the City of Espoo sold
approximately 34% of Espoon Sähkö's shares, i.e. half of its remaining ownership,
to E.ON.
The shareholders' agreement granted the City the right to sell the remainder of
its Espoon Sähkö shares to E.ON by the end of the year 2004 and pre-emptive
rights to both parties.

In February 2002 E.ON made a public purchase offer for all Espoon Sähkö shares,
excluding the approximately 34% owned by the City of Espoo. As a minority
shareholder Fortum accepted E.ON's offer in March 2002 and sold its approximately
28% stake. As a result of the purchase offer Espoon Sähkö became a subsidiary of
E.ON and the name Espoon Sähkö was later changed to E.ON Finland.

In April 2002 E.ON and Fortum agreed upon the Wesertal deal in which Fortum sold
its power operations in Germany to E.ON. The total value of the deal was
approximately EUR 550 million. In connection with the Wesertal deal E.ON signed
an agreement with Fortum according to which Fortum has the right to purchase all
E.ON Finland shares held or acquired later by E.ON. According to the agreement,
the effective dates of the call option are 1st of January to 31st March, 2005. As
the call option was to start after the put option period that the City of Espoo
and E.ON had agreed upon, this agreement did not conflict with the shareholders'
agreement between the City of Espoo and E.ON.

In November 2003 Rahoitustarkastus (The Financial Supervision Authority) required
E.ON Finland to announce the agreement between E.ON and Fortum, and E.ON Finland
announced it accordingly. Rahoitustarkastus stated that Fortum had no obligation
to make the agreement public.

Later in November 2003 E.ON and the City of Espoo signed a new shareholders'
agreement, and E.ON Finland announced its principal content. E.ON's obligations
in the new agreement conflicted with the agreement that E.ON had signed with
Fortum. In the new agreement with the City of Espoo, E.ON committed itself not to
sell its E.ON Finland shares to Fortum before the end of the year 2009, except if
it is obliged by a court order to sell the shares or the City of Espoo permits
selling the shares. In Fortum's view its call option is undisputable.