Danish offshore wind developer Ørsted has agreed to divest its power distribution and two other businesses to focus on renewable energy.
Ørsted said the deal with SEAS-NVE is valued at $3.15 billion deal and includes its power distribution business, Radius, as well as its residential customer and City Light businesses.
The deal follows an unsolicited, non-binding offer which Ørsted received from SEAS-NVE in second half of June 2019. In June 2018, Ørsted’s Board of Directors and Executive Management decided that the divested units did not represent the best long-term positions, leading to a structured divestment process ultimately fell apart from lack of political support.
“The agreement ensures an attractive transaction for Ørsted’s shareholders and provides a good future home for the customers and for our highly skilled employees,” said Henrik Poulsen, CEO and President of Ørsted. “We’ll use the proceeds from the divestment to continue our global investments in green energy.”
Closing of the agreement is expected to take place in the first half of 2020 following regulatory approvals. Proceeds from the deal will be paid in cash upon closing.
The approximately 750 employees working for Radius and the Danish residential customer and City Light businesses will transfer to employment with SEAS-NVE.
In the first half of this, the three business accounted for 7.9% of Ørsted’s operating profit (EBITDA) and 9.4% of its capital employed.