Norwegian energy company Equinor has agreed to acquire 100% stake in Danish power and natural gas trading firm Danske Commodities (DC) for €400m.
The acquisition is part of Equinor’s strategy to move from being an upstream oil and gas company to becoming a broad energy company.
It will enable to combine Danske Commodities’ market presence and expertise in energy trading with Equinor’s position in gas and growing portfolio in renewables.
Equinor marketing, midstream and processing executive vice-president Jens Økland said: “Danske Commodities’ trading platform and geographic footprint will support our strategy through leveraging DC’s material trading position in electricity and natural gas.”
The Norwegian firm said it is planning to invest 15-20% of its capital expenditure in new energy solutions, including renewable energy, by 2030.
Equinor new energy solutions executive vice-president Irene Rummelhoff said: “This transaction will strengthen our ability to capture value from our current and future equity production of renewable electricity and supports our aim to grow in new energy solutions.
“We see excellent opportunities to develop our collective understanding of various national markets in a world where renewables to a larger and larger degree will be exposed to market risk.”
Employing with 284 people, DC is engaged in short-term gas trading and provides energy market services.
In 2017, the firm has traded 318 terawatt hours of electricity across 37 countries, and 389 terawatt hours of gas across 18 countries.
Danske Commodities CEO Henrik Lind said: “Under Equinor’s ownership Danske Commodities will benefit from a stronger financial position and a portfolio of gas and renewable assets across Europe that can be optimised in the short-term dynamic market and give us further trading opportunities.
“We will have an owner with big ambitions in renewables that can accelerate our ability to scale and make investments, and whose values and people are a strong match and fit with our own.”
Equinor said that the agreement will allow both the firms to create value along the full electricity value chain.
The deal is subject to certain conditions, including European Commission approval.
The transaction will include smaller contingent payments depending on DC’s performance over the next couple of years.