Canada Pension Plan Investment Board and KKR & Co. are among suitors weighing bids for Vattenfall AB’s district heating business in Berlin, people with knowledge of the matter said.
(Bloomberg) — Canada Pension Plan Investment Board and KKR & Co. are among suitors weighing bids for Vattenfall AB’s district heating business in Berlin, people with knowledge of the matter said.
Macquarie Group Ltd. is also considering a potential offer for the asset, the people said, asking not to be identified discussing confidential information. The city of Berlin has already expressed interest in bidding in partnership with European utilities Engie SA and E.ON SE.
Swedish utility Vattenfall announced in May last year it was conducting a strategic review of the business in the German capital, which operates 10 combined heat and power plants. It has some some exposure to coal and Vattenfall wants to sell to a party that will reduce this, Chief Executive Officer Anna Borg said previously.
Both France-based Engie and Germany-based E.ON have been cutting their exposure to fossil fuels and turning to more renewable sources of power generation, amid a broader push to net zero.
While Borg has said the heating asset could fetch €3 billion ($3.2 billion), bidders may offer less if they think a lot of future investment is needed in the business, according to the people.
Deliberations are in the early stages there’s no certainty any of the parties will decide to submit proposals, they said. A spokesperson for Vattenfall said it had received numerous expressions of interest and would decide whether to sell the business in the course of the year.
Spokespeople for CPPIB, Engie, KKR and Macquarie declined to comment, while a representative for the city of Berlin didn’t immediately provide comment. A spokesperson for E.ON said the company was supportive of Berlin’s plans to decarbonize the city’s heat supply.
Read more: Germany in Talks to Merge Power Grids Through Buyouts
–With assistance from Josefine Fokuhl, Petra Sorge, Jan-Henrik Förster and Lars Paulsson.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.