State of Berlin Acquires Vattenfall’s Heating Business in Billion-Euro Deal

State of Berlin Acquires Vattenfall’s Heating Business in Billion-Euro Deal

(IN BRIEF) Vattenfall has finalized the transfer of all shares in Vattenfall Wärme Berlin AG, including power plants, grids, subsidiaries, and employees, to the State of Berlin for approximately 1.4 billion euros. This strategic move aligns with Berlin’s goal to generate 40 percent of district heating from renewable sources by 2030 and achieve climate neutrality by 2040. With the sale, around 1,800 employees will transition to the State of Berlin’s ownership, ensuring the continued operation of heating services for approximately 1.4 million residential units in the city. While this marks the end of Vattenfall’s district heating activities in Germany, the company remains committed to the energy transition, focusing on fossil-free electricity production and investments in renewable energy and electric vehicle infrastructure.

(PRESS RELEASE) STOCKHOLM, 3-May-2024 — /EuropaWire/ — The corresponding contracts were signed in December 2023. The Berlin Parliament approved them in March. The Federal Cartel Office has also granted the necessary merger control clearance in early April. The purchase price amounts to approximately 1.4 billion euros. In order to generate 40 percent of district heating from renewable energy sources by 2030 as planned and to achieve climate neutrality from 2040, additional billions will need to be invested.

With the sale, around 1,800 persons will no longer work for Vattenfall, but for an entity owned by the State of Berlin. In the coming months, further employees from Vattenfall’s central functions, such as HR and Finance, will transfer to the heat company.

The sold heating business supplies around 1.4 million residential units with hot water and heat and operates 10 large heating and combined heat and power plants as well as 105 smaller combined heat and power plants and various other facilities in Berlin. The heating network has a total length of around 2,000 kilometers.

The sale relates to the entire heating business in Berlin, including the subsidiaries of Vattenfall Wärme Berlin AG. The object of the sale is all shares (100 percent) of Vattenfall Wärme Berlin AG, which holds further interests, including in Fernheizwerk Neukölln AG, Berlin (80.80%) as well as in Vattenfall Energy Solutions GmbH and Energy Crops GmbH (100 percent each).

When the sales contracts were signed in December 2023, a purchase price based on an enterprise value of just under EUR 2 billion was agreed. After preparing the 2023 annual financial statements and deducting net liabilities, among others for pension obligations), the purchase price amounts to approximately EUR 1.4 billion.

The sale means the end of Vattenfall’s district heating activities in Germany. However, Vattenfall will remain an important player in the German energy transition, with more than five million customers, fossil-free electricity production from hydro, continental European wholesale activities and heavy investments in solar, onshore and offshore wind capacities and charging points for electric vehicles.

Media Contact:

Vattenfall Media Relations:
+46 8 739 50 10
press@vattenfall.com

Vattenfall Media Relations Germany:
Christian Jekat
+49 151 57 25 53 47
Christian.jekat@vattenfall.com

SOURCE: Vattenfall AB