The strategic divestment aligns Fortum’s focus on clean energy and decarbonisation, with the transaction expected to close in Q4 2024.
Fortum has signed an agreement to sell its recycling and waste business to Summa Equity through its portfolio company NG Group, for approximately EUR 800 million on a debt- and cash-free basis. This transaction is expected to yield Fortum a tax-exempt capital gain of approximately EUR 110 million, with the final gain subject to the closing balance sheet value. The gain will be recorded in the Other Operations segment as Items Affecting Comparability once the transaction is completed, anticipated in Q4 2024, pending customary closing conditions.
This divestment is part of Fortum’s strategic review of its Circular Solutions businesses, initiated in August 2023, to focus on clean energy and decarbonisation in the Nordics. The recycling and waste business, employing around 900 people across Finland, Sweden, Denmark, and Norway, includes municipal and industrial waste management and recycling services for plastics, metals, ash, slag, and hazardous waste.
Fortum’s President and CEO Markus Rauramo expressed satisfaction with Summa Equity as the new owner, emphasizing its potential to drive growth in the recycling and waste sector. Summa Equity, an impact investor with EUR 5 billion in assets under management, aims to address global challenges through investments in Resource Efficiency, Changing Demographics, and Tech-Enabled Transformation.
Summa Equity’s Reynir Indahl highlighted the importance of the combined entity in achieving EU 2050 Climate Neutrality and Zero Pollution goals, while NG Group’s Chairman Bertrand Camus underscored the strong cultural fit and complementarity between the two teams.
Post-divestment, Fortum will focus on its core clean power generation operations and strategic capital allocation, balancing investment, shareholder returns, and balance sheet strength. The recycling and waste business assets will be classified as Assets held for sale in Q3 2024.
Fortum will continue the strategic review of its remaining Circular Solutions businesses, which include turbine and generator services, battery recycling, biobased solutions, and a UK-based waste-to-energy business. The remaining businesses, with net assets of EUR 90 million and approximately 400 employees, reported a comparable EBITDA of EUR -29 million over the past twelve months.
Following the transaction, Fortum’s annual maintenance capital expenditure guidance will be reduced from EUR 300 million to EUR 250 million from 2025 onwards, lowering the group’s capital expenditure forecast for 2024–2026 to up to EUR 1.6 billion from the previous EUR 1.7 billion.