Dong to Become State-Owned Again
The European Commission has cleared the Danish state to acquire sole control of Dong Energy.
The Danish finance ministry jointly with US bank Goldman Sachs currently jointly control Dong, which produces North Sea oil and gas, offshore wind power, and markets gas.
Announcing its decision on April 28, the commission concluded that the proposed acquisition would raise no competition concerns, as Denmark already had control over Dong prior to the transaction and that the transaction is a change from joint to sole control. It was examined under the EC’s simplified merger review procedure.
Goldman Sachs’ acquisition in January 2014 of an 18% stake in Dong for some $1.5bn led to street protests in Copenhagen against the centre-left government which was ousted a few months later in elections. Last year the US bank tried to draw the sting by appointing former NATO secretary-general Anders Fogh Rasmussen to improve its relations with the government and to counter the perception its 18% stake had been under-priced. The new centre-right government, under pressure from parliament, instead forced the 18% stake to be re-tendered and excluded the bank from bidding.
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At 1Q 2016 results on April 27, Dong said that preparations for a planned Initial Public Offering (IPO) of Dong “proceed according to plan and the shareholders and the Board of Directors continue to target a listing of the company before the end of 1Q 2017.” Its 1Q 2016 net profit was Dkr 5.2bn ($790mn), an increase of Dkr 3.5bn over the corresponding 2015 quarter's profit which was impacted by write-downs.
Mark Smedley