Sweden’s Vattenfall and Danish power company Dong have reached an agreement under the terms of which Vattenfall will take over approximately 24% of the generation capacity of Danish utility group Elsam/E2.
The deal will see Vattenfall secure a significant presence in the CHP and wind power sectors in Denmark. In exchange for these assets, Dong will take over Vattenfall’s 35.3% holding in Elsam and the Vattenfall holding in the Avedöre II power station will also be transferred to Dong/Elsam/Energie E2.
Vattenfall’s president and chief executive, Lars G. Josefsson said of the deal: “Our move into the CHP and wind power sectors in Denmark represents an important strategic investment in our Nordic operations.”
Vattenfall will take over the Nordjyllandsværket power plant in Ålborg, the Fynsverket plant in Odense and the Amagerverket plant in Amager, as well as plants in Helsingör and Hilleröd. These facilities are both coal- and gas-fired with a capacity of 2,400 MW. Vattenfall will also take over Elsam’s on-shore wind power assets and 60% of the Horns rev wind farm along with a wind farm under construction at Kentish Flats, off the UK coast.
It has also been agreed that some 700 employees will be transferred to Vattenfall from Energie E2 and Elsam.
The asset distribution is expected to take place this summer given approval of the deal by the relevant competition authorities. It brings to a close a six month battle for control over the Danish electricity sector which saw a bidding battle for Elsam, Denmark's largest generator which co-owns another Danish power firm Energi E2. Although Dong acquired a 65 per cent share, the Swedish stake spoiled its plans to merge itself, Elsam, Energie E2 and smaller suppliers Nesa, Kobenhavens Energi and Frederiksberg Forsyning into a new Danish national champion.
With the conflict now resolved, Dong is now likely to push for a 2006 share offering.
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