EQT Infrastructure acquires Swedegas

  • EQT Infrastructure acquires Swedegas from E.ON Ruhrgas, Statoil, DONG Energy and Fortum
  • Swedegas is the owner and operator of the largest part of Sweden’s gas transmission network located in southern and western Sweden
  • Swedegas is an essential part of Sweden’s energy infrastructure and plays a vital role in the supply of both energy and industrial feed stock in the region

The EQT Infrastructure Fund (EQT Infrastructure) will acquire all of the share capital in Swedegas from the existing four owners; E.ON Ruhrgas, Statoil, DONG Energy and Fortum. Swedegas owns and operates the largest part of the Swedish high-pressure gas transmission network, located in southern and western Sweden. The investment is the fund’s third and the first investment in Sweden.

“We are very happy to have EQT Infrastructure as a new independent and dedicated owner of this important infrastructure. We believe EQT Infrastructure has all the requirements to continue to develop the company towards a key position in the Swedish gas market,” says Lars Gustafsson, CEO of Swedegas.

Swedegas owns the largest part of Sweden’s gas transmission network with a total length of 390 kilometers. Revenues in 2008 were approximately SEK 218 million. Swedegas is regulated by the Swedish Energy Markets Inspectorate and holds government concessions for its network.

Swedegas transports gas in its network from Dragør, the only interconnection of Sweden with Denmark and the extended European gas transmission network. In the future this infrastructure can play a key role when developing the Swedish biogas potential.

Although only around 2% of Sweden’s total energy supply comes from gas, in the southern and western parts of Sweden covered by the gas transmission network, it accounts for about 20%.

”We are thrilled to make this investment, which fits very well with the fund’s investment strategy. In addition to promoting the stability and development of the gas market including existing customer relationships, we see interesting potential in supporting industries to replace oil with gas as fuel and also in meeting the increasing demand for vehicle gas. Transporting biogas is another promising opportunity,” says Stefan Glevén, Director at EQT Partners, advisor to EQT Infrastructure.

By replacing oil with energy gas, the emission of the greenhouse gas CO2 can be reduced by more than 25%. Similarly vehicles running on energy gas instead of petrol or diesel have much lower emissions of CO2.

Ownership and board of directors
The transaction will be financed by equity and debt, and EQT Infrastructure will together with the Board of Directors and management own 100% of the equity interests in Swedegas. The investment is financed by approximately half equity and half by bank loans provided by Nordea Bank AB and Skandinaviska Enskilda Banken AB. In agreement with the sellers no further financial details will be disclosed at this stage.

The new board of directors will include the following members from the EQT network of industrialists:

  • Lars Frithiof, ex CEO E.ON Sverige
  • Kurt Håkansson, ex SVP ABB, ex EVP Areva (Alstom)
  • Pär Nuder, ex Minister of Finance, Sweden

Nordea Corporate Finance acted as exclusive financial advisor to EQT Infrastructure and Vinge acted as legal advisor to EQT Infrastructure in the transaction. The transaction is subject to certain conditions and is expected to close during Q1 2010.