Stock exchange release

Fortum and City of Oslo restructure ownership in Hafslund and announce partnership for a greener Oslo

26 April 2017, 08:30 EEST


Fortum and the City of Oslo have entered into an agreement to restructure their
ownership in Hafslund ASA, one of the largest listed power groups in the Nordic
region. The transactions are subject to approval by the Oslo City Council
(Bystyret), the necessary regulatory approvals and fulfilment of the customary
closing conditions. The closing of the transactions is expected during the
third quarter of 2017.

Fortum will sell its 34.1% stake in Hafslund ASA to the City of Oslo for
approximately EUR 730 million before the proposed dividend for the Annual
General Meeting 2017. Fortum will book a one-time tax-free sales gain totalling
approximately EUR 330 million, which corresponds to EUR 0.37 earnings per
share. The final gain will be determined at the closing of all transactions and
will be reported in Fortum's Other segment.

Fortum will acquire 100% of Hafslund’s current Markets business area, which
operates in Norway, Sweden and Finland. This will almost double Fortum's number
of electricity retail customers in the Nordics – from 1.3 million to 2.4

Hafslund’s Heat business area and the City of Oslo’s waste-to-energy company
Klemetsrudanlegget AS (KEA) will be combined into one company, forming an
integrated value chain in the waste-to-energy system. Fortum will acquire 50%
of the combined company. The combined entity will be owned 50/50 by Fortum and
the City of Oslo, with Fortum having operational responsibility. Heat and KEA
will be consolidated as a subsidiary to Fortum, with a 50% minority interest.

In addition, Fortum will acquire 10% of Hafslund’s current Production business

The total debt-free price of the acquisitions is approximately EUR 970 million.

The combined net cash investment of the transactions is expected to be
approximately EUR 240 million. In 2016, the combined consolidated Sales and
EBITDA of Hafslund Markets and Heat & KEA (on a 100% basis) were approximately
EUR 950 million and approximately EUR 130 million respectively.

More details of the transactions are found as an attachment to this release.

Green partnership

"We are forming a strong partnership with the City of Oslo in areas where we
can combine competences to drive innovation for a greener Oslo, one of Europe’s
fastest growing urban areas. At the same time, we want to enable people and
businesses to make more environmentally friendly choices. KEA is also a
contender for Norway’s carbon capture and storage pilot programme, and I
believe that together with Fortum, its position will be stronger," says Pekka
Lundmark, Fortum’s President and CEO.

"In electricity retail the combination of Hafslund and Fortum will have
significant scale benefits, which will enhance the development of new
technologies and services for customers. The proposed transactions support
Fortum’s strategic growth and cash flow ambitions. We are naturally very
excited to be able to develop sustainable solutions for yet another major
European city. Our strategy implementation will continue and we still have
significant financial headroom available for market consolidation," Pekka
Lundmark concludes.

"We are very pleased to have Fortum as our industrial partner in district
heating and cooling and waste-to-energy. Together we will better be able to
develop new technologies for sustainable and smart solutions for Oslo and its
inhabitants," says Raymond Johansen, Governing Mayor of Oslo.

Fortum Corporation

Sophie Jolly, Vice President, Investor Relations and Financial Communications

Additional information:

Pekka Lundmark, President and CEO, and Markus Rauramo, CFO
Media call-back requests: Pauliina Vuosio, Corporate Press Officer, tel. +358
50 453 2383

Sophie Jolly, Vice President, Investor Relations and Financial Communications,
tel. +358 10 453 2552

Webcast/teleconference for analysts and investors 27 April 2017

An international teleconference and live webcast, for institutional investors
and analysts, regarding the transactions and the January-March 2017 results,
will be arranged on Thursday 27 April 2017 at 16.00 EEST. To participate in the
teleconference, please dial in some five minutes before the scheduled time:

European callers: +44 (0)330 336 9412

US callers: +1 719 325 4746

Confirmation code: 3832411


Nasdaq Helsinki
Key media

Hafslund ASA is listed on the Oslo Stock Exchange and one of the largest listed
power groups in the Nordic region. Hafslund is a pure-play energy and
infrastructure company with a leading position as Norway's largest networks,
district heating and power sales company, and is a medium-sized power producer.
The regulated networks business accounts for around half of Hafslund's capital
employed. Networks secures Hafslund stable and predictable returns in a period
of low power prices.

Fortum is a leading clean-energy company that provides its customers with
electricity, heating and cooling as well as smart solutions to improve resource
efficiency. We want to engage our customers and society to join the change for
a cleaner world. We employ some 8,000 professionals in the Nordic and Baltic
countries, Russia, Poland and India, and 62% of our electricity generation is
CO2 free. In 2016, our sales were EUR 3.6 billion. Fortum's share is listed on
Nasdaq Helsinki.