Agder, Glitre eye merger to form Norway's third largest hydropower firm

OSLO (Reuters) - Norwegian municipal energy groups Agder Energi and Glitre Energi are exploring a tie-up that would form the country’s third-largest hydroelectric power producer and the number two grid operator, the firms said on Tuesday.

Technological change and the electrification of the wider economy are making the energy industry more complex and thus driving consolidation among utilities, Agder and Glitre said.

“For the companies left standing alone, it will become more challenging to build a successful, profitable future,” the companies said in a joint statement.

Agder, the larger of the two, would contribute around three quarters of the combined 10.8 terrawatt hours (TWh) of annual electricity production capacity, out of Norway’s overall capacity of around 136 TWh per year.

“A potential merger would increase the competitiveness and profitability of the groups, and would create jobs and support value creation,” the companies said.

The talks will now be expanded to more detailed discussions to see whether the fit is as good as expected.

Agder Energi is owned by local municipalities in southern Norway as well as state-owned energy firm Statkraft. Glitre is owned by the municipalities in the southern-central regions of Drammen and Buskerud.

In 2019, Agder had full-year revenues of 14.1 billion Norwegian crowns and a net income of 1.1 billion crowns, while Glitre’s revenue amounted to 1.9 billion crowns with earnings after tax of 371 million.

Reporting by Nora Kamprath Buli, editing by Terje Solsvik