DONG Energy Looks at Shedding Oil, Gas in Strategy Rethink

Reuters

COPENHAGEN, Oct 26 (Reuters) – Danish utility DONG Energy is looking at whether to jettison its oil and gas business, which it said on Wednesday will not form part of its long-term strategy as it shifts to wind power.

DONG Energy said in a statement it had engaged U.S. investment bank JP Morgan to conduct a preliminary market assessment of the business, which it does not view as a long-term strategic asset.

Danish logistics firm A.P. Moeller Maersk held preliminary talks with DONG Energy last year to buy the business but the companies failed to agree on a price, according to a Bloomberg report last month.

Sydbank analyst Morten Imsgard said the business could be worth up to 14 billion Danish crowns ($2.05 billion).

DONG Energy was floated on the Danish stock market in June in Europe's biggest listing so far in 2016, raising 17 billion crowns ($2.6 billion) for the Danish state.

The firm has moved to the forefront of international offshore wind farm development, and its wind business became its biggest contributor to profits in the first half of this year with 42 percent of earnings before interest, tax, depreciation and amortisation (EBITDA), overtaking oil and gas.

DONG Energy also said its financial outlook for 2016 was unchanged.

Since the flotation, DONG Energy's share price has fluctuated between 260 and 280 Danish crowns. At 0735 GMT it was trading up 0.2 percent at 269 crowns. ($1 = 6.8152 Danish crowns)

(Reporting by Nikolaj Skydsgaard; Writing by John Stonestreet; Editing by Alexander Smith)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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