Sweden ‘warned’ of Vattenfall’s Nuon buy

Sweden 'warned' of Vattenfall's Nuon buy
The Swedish government was told that allowing part state-owned energy giant Vattenfall to buy Dutch company Nuon would add little profit and instead risk costing Swedish citizens, a new report has revealed.

Management consultants McKinsey looked into the merits of a would-be purchase and stated that “a bigger buy would entail risk and would not created value per se,” Sveriges Television (SVT) reported on Wednesday after the report was declassified.

The report further stated that the deal meant Vattenfall may have to ask its owners, the Swedish state, for additional funds.

Then Enterprise Minister Maud Olofsson told SVT that she did not wish to comment the Nuon purchase, but said she had made attempts to persuade Vattenfall ‘to calm down’ its expansion bid.

In July, when Vattenfall announced it was writing down the value of its assets, the political opposition called for an independent inquiry into the Nuon affair.

RELATED STORY:Vattenfall writedown wakens Nuon spectre

The 2009 purchase made Vattenfall one of the three biggest electricity generators in the Netherlands. But three years on, most of July’s massive writedown arose from the company’s Nuon operations, with many observers saying the company overpaid for its Dutch subsidiary.

Sweden’s Financial Markets Minister Peter Norman underlined that the government had nothing to do with the board of the state-owned company’s decision to buy the Dutch power company, although credit rating agency Moody’s noted in 2011 that “The Swedish state exercises long-term active ownership over the company and views value creation as a paramount goal for Vattenfall”.

TT/The Local/at

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