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Vattenfall sale prompts restructuring of Scandinavian power market

Vattenfall, the dominant force in the Scandinavian energy sector, today announced it was selling its Norwegian subsidiary, Oslo Energi, to Norway’s Hafslund ASA. As part of a deal due to be finalized later this year, Vattenfall will become part owner of power group Hafslund although it will maintain an independent presence in Norway.

The payment to be made to Vattenfall by Hafslund will consist of the transfer of loans, cash and Hafslund shares amounting to approximately 10 per cent of the share capital.

The deal is part of the structural transformation of the Norwegian power market. Hafslund is to merge with Viken Energinett, which means that a new Norwegian power group will be formed. This acquisition will make Hafslund one of the largest players in the Nordic region in the electricity transmission and sales field.

“I am convinced that Oslo Energi will develop well in co-operation with Hafslund,” said Vattenfall president and CEO Lars G Josefsson. “We believe that the deal is right from the structural point of view and that it will provide major synergies and much greater opportunities for an appreciation in value for Vattenfall than if Oslo Energi were to remain outside the new Norwegian power group.”

Vattenfall said the deal would allow them to focus on its resources in Sweden, Finland, Germany and Poland in line with group strategy.