By Sven Nordenstam
STOCKHOLM Dec 11 Finnish utility Fortum
is in exclusive talks to sell its power grid in
Finland for more than 2 billion euros ($2.75 billion) to a
consortium led by the First State and Borealis infrastructure
funds, two people familiar with the matter said.
One of the sources, who declined to be identified because
the process is not public, said a sale could be announced in the
Macquarie European Infrastructure Funds and Cheung Kong
Infrastructure (CKI), an investment entity controlled by Hong
Kong Billionaire Li Ka-Shing, also submitted final bids, the
Fortum and First State declined to comment. Borealis,
Macquarie and CKI did not immediately respond to a request for
The state-controlled utility launched a sale of the grid in
September, inviting first-round bids from prospective buyers in
mid-October, according to sources.
Fortum is the largest electricity distribution operator in
the Nordic region and its distribution business contributed to
15 percent of group sales in 2012.
European energy firms are off-loading networks to cut debt
and focusing on power generation and renewable energy as EU
directives require them to relinquish control over grids.
Infrastructure assets are attractive to investors looking
for steady and low-risk returns, such as pension funds.
Borealis Infrastructure is the infrastructure investment arm
of Canadian pension fund OMERS which manages over $60 billion of
assets. First State Investments is an asset management business
owned by the Commonwealth Bank of Australia and manages more
than $160 billion.
Sources told Reuters in March Fortum had hired Citigroup and
Danske Bank to explore a sale of its electricity distribution
business in Sweden and Finland, and that several infrastructure
funds were considering bidding.