Fortum gained the option to acquire the interest in Eon Finland following the company’s Wesertal agreement with Germany’s Eon in 2002. According to the contract, Fortum has the option to buy shares during three months from the beginning of 2005 at a price of about E38 per share.
In addition, Fortum announced that it was to buy out the City of Espoo, which is the largest minority shareholder of Eon Finland with a share of approximately 34.2%. With an offered price of E48 per share, this deal would be worth about E257 million in cash.
Fortum said that the acquisitions would be funded through debt financing, using existing credit facilities.
When the transactions have been realized, Fortum plans to develop the operation of Eon Finland. The company said that it would invest E300 million into expanding its main power plant in Suomenoja, Espoo and increase the power generation capacity significantly to almost 400-megawatts.
According to Mikael Lilius, CEO of Fortum, Eon 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 Eon 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, explained Mr Lilius.
