Fortum and City of Espoo reach agreement on E.ON Finland shares. Press Conference on 21 December 2005 at a.m.

Transcription

1 Fortum and City of Espoo reach agreement on E.ON Finland shares Press Conference on 21 December 2005 at a.m. 1

2 Fortum Our energy will facilitate the lives of present and future generations. Vision Strategy Values To be a first-class power and heat company Financially sound company Second largest Finnish listed company measured by market value Reliable partner Strong focus on customers 2

3 Fortum is at home in the Nordic countries An integral participant in the Nordic society and market place Willing to develop the market place to benefit customers Pioneer in environmental issues Readiness for long-term solutions and investments Strong know-how and adequate size to take matters forward Market leader Heat Distribution No 1 challenger Electricity sales Power generation 3

4 Fortum in Espoo Fortum has long roots in Espoo Fortum decided to transfer its head office to Espoo in 1999 Operations were transferred from Helsinki and Vantaa Fortum employees already work in Espoo 4

5 E.ON Finland and Fortum complement each other well Significant benefits together E.ON Finland and Fortum can effectively grab the opportunities provided by deregulated electricity markets economies of scale in all business areas best practices implemented in both companies Good geographical compatibility Demand for electricity to increase in Southern Finland together good qualifications for the necessary investments the combination allows the Suomenoja power plant investment to be carried out in a significantly larger capacity Joint number of electricity customers in Finland to increase: Fortum 350,000 customers E.ON Finland 175,000 customers Fortum Distribution Ltd Fortum s associated companies Espoo area 5

6 Transaction has no major implications on competition Electricity production in the Nordic countries (2004), TWh Sales of electricity Vattenfall Fortum 1.0 TWh E.ON E.ON Statkraft Pohjolan Voima Elsam Fortum Vattenfall Hafslund Elsam/NESA Copenhagen Helsinki energia 0.17 million Vattenfall owns 50 % of Plus Energia Energi E2 Fjordkraft Öresundskraft Others 141 TWh Others 7.4 million TWh/a customers Increase in Fortum s market share In the Nordic countries +0.3% (15%) Increase in Fortum s market share In the Nordic countries + 1.3% (10%) In Finland + 5.8% (17%) E.ON Finland Oy figures fully combined with Fortum figures. 6

7 Transaction has no major implications on competition, continued Distribution, largest companies in the Nordic countries District heat, largest companies ** Fortum 0.15 million Fortum 2.5 TWh/a Vattenfall E.ON Nordic E.ON Helsinki Energia Elsam/NESA Vattenfall Hafslund Göteborg Energi Copenhagen Copenhagen Helsinki Energia VEKS Statkraft Århus Others 1000 customers 7.8 million Others TWh/a 67 TWh Increase in Fortum s market share In the Nordic countries +1.2% (11%) In Finland +5.3% (19%) * Increase in Fortum s market share In the Nordic countries +2.4% (11%) In Finland +8.3% (9%) E.ON Finland Oy figures fully combined with Fortum figures. * In Finnish electricity distribution (less than 0.4 kv), Fortum s market share increases from 16 % to 21 % ** Figures calculated based on the number of end customers 7

8 Transaction in brief Fortum acquires all the 5,351,859 E.ON Finland Oyj shares currently held by the City of Espoo, which correspond to 34.2% of the shares and the voting rights of the company. The purchase price is EUR 68 per shares, i.e. approximately EUR 364 million in total. The Espoo City Board will propose to the Espoo City Council the acceptance of the transaction on 16 January The intention is to sign the agreement on 17 January 2006 provided that it has been approved by the City Council. Another prerequisite for the transaction to take effect is that the 10,246,565 E.ON Finland shares currently held by E.ON Nordic AB have been transferred into the ownership of Fortum. The total purchase price for Fortum is approximately EUR 750 million, including the redemption offer for minority shareholders holding 0.2% of shares. The turnover of the E.ON Finland Group over the last 12 months (October September 2005) was approximately EUR 232 million, EBITDA roughly EUR 72 million and operating profit about EUR 43 million. 8

9 All parties to benefit The City of Espoo gets approximately EUR 364 million in cash for its shares. The combination of Fortum and E.ON Finland will create an even stronger company based in Espoo with good qualifications to succeed in international competition. The residents of Espoo, the City of Espoo and Fortum will all benefit from the transaction. 9