Finnish institutions unveil utility deal

PowerlinesTwo Finnish institutional investors and a consortium that includes First State Investments are to buy the largest electricity distribution network in Finland. Keva, a local government pension scheme, LocalTapiola Pension, an insurance company, First State Investments and Borealis Infrastructure are acquiring Fortum Distribution Finland from the Fortum Group. Fortum Group has more than 600,000 customers and a market share in excess of 20%. The deal is costing the consortium €2.55 billion on a debt- and cash-free basis. Marcus Ayre, partner, direct infrastructure, at First State Investments, says the deal represents a unique investment opportunity that allows the asset manager to leverage its regulated infrastructure capability. It is First State’s second significant investment in Finland, Ayre says, having bought Digita in October last year. Fortum says its decision to divest its electricity distribution business in Finland is linked to the strategic assessment of the company's future. It is expected that the transaction, which is subject to approval from regulators, will be completed in the first quarter of next year. ©2013 funds europe

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