Danish renewable energy company Ørsted has agreed to sell its Danish utility business to Seas-Nve for $3.2bn (DK21.3bn). Seas-Nve will purchase the business on an all-cash basis and purchase approval is expected to take place during the first half of 2020.
The deal will see Ørsted’s residential customer business, grid company Radius and outdoor lighting businesses, along with 750 employees, transfer to Seas-Nve. These businesses supply two million customers and accounted for 8% of Ørsted’s operating profit in its 2019 H1 financial results. Seas-Nve will also reduce its shares in Ørsted from 10% to 5% in the next 12 months.
Ørsted CEO Henrik Poulsen said: “The agreement ensures an attractive transaction for Orsted’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.”
Seas-Nve CEO Jesper Hjulmand added: “It is difficult to restrain our excitement on a day like today. With this acquisition, we have created a historically strong basis for SEAS-NVE. Not only do we get bigger, but most important of all, we get stronger.
“Volume and scale are needed to operate and develop critical infrastructure, such as the electricity grid, as well as developing large customer portfolios and new smart technological solutions. The acquisition will ensure continued falling tariffs at the same time as we get stronger muscles to drive the energy system in a greener direction.”
Following the news of the deal, Ørsted’s share price has remained stable, with a slight rise of 0.13% from DK627.60 to DK628.40 per share, giving the company a market capitalisation value of DK263.8bn. The company’s stock value has risen exponentially in 2019, having started the year at DK428.10 a share.
Ørsted’s share price in 2019
Seas-Nve describes itself as a “cooperatively-owned energy and fibre-optic group” based in Svinninge, Denmark. Along with the purchase of Orsted’s utility business, the company owns or has a majority share in energy companies such as Cerius and the Rødsand 2 offshore windfarm.