HELSINKI, April 19 (Reuters) - Finnish utility Fortum is powering ahead with a plan to sell its electricity and gas retail businesses in a deal that could fetch around 1.5 billion euros ($1.8 billion), three people familiar with the matter said.
Fortum said in December it was considering a possible divestment of the consumer unit, which contains the largest electricity retail business in the Nordic region with 2.4 million customers across Finland, Sweden, Norway and Spain.
It has now hired investment bank Citi to help it find a buyer, the people said. According to two sources, it has also sent out first information packages to potential bidders, including Germany’s E.ON and Sweden’s Vattenfall.
Smaller local players like Norwegian neighbour Fjordkraft may also be interested in parts of the business, one of the people said, while another person said that financial sponsors are likely to show interest.
The price tag could be up to 10 times the 153 million euros in comparable core earnings that the unit garnered in 2020, two of the people familiar said.
Fortum was not available for comment, while Citi declined to comment. E.ON declined to comment, and Vattenfall and Fjordkraft did not immediately respond to requests for comment.
Energy efficiency has become a focus of the global drive to stem climate change, pushing electricity retail from manual meter readings into a digital world of smart meters and other services.
Fortum is one of a growing crowd to have pledged to emit no more carbon than can be absorbed by natural carbon sinks and other technology by 2050.
It plans to cut its coal-fired generation by more than half to 5 gigawatts by the end of 2025, and build 1.5-2GW of new onshore wind and solar power capacity in that time.
In a bid to cut debt, which doubled in 2020 to 9.8 billion euros due to its takeover of Uniper, Fortum is also considering selling other assets, including its 50% share in district heating and cooling company Stockholm Exergi in an auction organised by Citi and Danske Bank.
Italy’s Eni and Spain’s Repsol have both bought smaller power supply companies that focus on online services this year. ($1 = 0.8312 euros) (Reporting by Arno Schuetze in Frankfurt and Isla Binnie in Madrid; Additional reporting by Essi Lehto in Helsinki; Editing by Jan Harvey)
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