Goldman Sachs to take 19% in Dong Energy in USD-1.5bn deal

Oct 2, 2013 - US investment bank Goldman Sachs Group Inc (NYSE:GS) will spend DKK 8 billion (USD 1.46bn/EUR 1.1bn) on a stake of around 19% in Danish state-owned utility Dong Energy A/S, the latter said today.

At the same time, two of Denmark’s biggest pension funds -- Arbejdsmarkedets Tillægspension (ATP) and PFA Pension Forsikringsaktieselskab will invest DKK 2.2 billion and DKK 800 million, respectively, taking stakes of 5% and 2% in the company.

The deal with the three new investors values Dong Energy at DKK 31.5 billion and will cut the government’s stake to 60% from 81% previously. It is subject to a number of conditions including due diligence and approval from the competition authorities.

The future shareholder have agreed with the government that they would together pursue an initial public offering (IPO) of Dong’s stock. There is a clause in the deal that gives Goldman Sachs, ATP and PFA the right to sell their interests back to Denmark if Dong remains private after 2017.

Apart from the government and the three new shareholders, there are several minority investors in Dong Energy whose combined stake now falls to 14% from 19%. They will be allowed to subscribe for additional stock at the same terms as Goldman Sachs, ATP and PFA so as to maintain their shareholding.

Dong Energy is focused on offshore wind farm development and oil and gas exploration. It calculates that its offshore wind capacity off the coasts of Denmark, the UK and Germany produces enough power for over two million homes in Europe. It aims to triple that number by the end of the decade.

(DKK 10 = USD 1.821/EUR 1.341)

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