We advised Fortum, a European energy company with activities in more than 40 countries on the sale of its district heating business in the Baltics to Partners Group, a leading global private markets firm, acting behalf of its clients.
Biggest M&A transaction in the Baltics in 2021
The transaction, subject to customary closing conditions, is expected to be completed in the second quarter of 2021. With a total consideration of EUR 800 million on a debt- and cash-free basis, this will most likely be the biggest M&A transaction in the Baltics in 2021.
The transaction is a continuation of Fortum’s strategy execution, whereby Fortum continuously reviews its businesses to optimise its portfolio for value creation.
Continuation of Fortum’s strategy
Fortum provides district heating in five cities in the Baltics – Tartu and Pärnu in Estonia, Daugavpils and Jelgava in Latvia and Klaipeda in Lithuania. Further, in those cities Fortum owns four CHP plants as well as a 49% share of the Kaunas CHP (commissioned in 2020) in Lithuania, through a joint venture.
“The divestment is in line with our portfolio optimisation and follows our successful divestments in Finland in 2020. The assets raised large interest among buyers as the business transformation to lower carbon intensity for these assets has largely been done,” said Per Langer, Executive Vice President, City Solutions at Fortum.
“This investment reflects Partners Group’s continuing commitment to transformational investing in assets that have meaningful impact on the communities in which they operate. The assets deliver heating to thousands of homes and businesses across the Baltic region, an area known for the severity of its winters,” says David Daum, Managing Director, Private Infrastructure Europe, Partners Group.
Our client team and services
We advised Fortum in all stages of the transaction in all Baltic countries. Our services included the preparation for the sale via auction process, conducting vendor due diligence of the Baltic business, buy-out of a minority shareholder in Estonia, Baltic level group restructuring, participating in expert sessions with the bidders, Baltic level project management and drafting of transaction documents as well as any questions related to competition law matters.
Our project team was led by of-counsel Isabella Barbara Tisenhusen and partner Toomas Prangli. The core team also included:
- In Estonia: senior associates Britta Retel, Mirjam Vichmann, Kaspar Endrikson, Piibe Lehtsaar, Lise-Lotte Lääne, associate Andra Grünberg and legal assistant Nils-Gregory Aer.
- In Latvia: partner Eva Berlaus, senior associates Renāte Purvinska, Viktorija Smirnova-Čerkasa and Zanda Frišfelde.
- In Lithuania: partner Sergej Butov, senior associates Jonas Kiauleikis, Aurimas Banys, Julija Kirkilienė and Monika Mališauskaitė-Vaupšienė, Aurelija Daubaraitė as well as associates Lukas Vaišvila and Sidas Sokolovas.