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13 December 2004 - Danish power utility Elsam and the state oil and gas group Dong have agreed terms for a merger, it was announced Friday.
The announcement follows protracted talks over the valuation of each company and intervention by the Danish government. Plans by Elsam to team up with Swedish shareholder Vattenfall instead brought objections from parties seeking a Danish solution.
The merger will be based on a value of Elsam of DKK 28bn ($5bn) and a value of Dong of DKK 21bn ($3.7bn), excluding the value of Dong's shareholding in Elsam.
Under the terms of the merger, a holding company is established, which shall own not less than 50.1 per cent of the share capital and the voting rights in the merged company. The holding company shall be owned by the State by more than 50 per cent and by the current Elsam shareholders by at least 25 per cent.
The new venture is to have a joint name and the merger is conditional upon amongst other things approval of the competition authorities.
Dong will offers to purchase those shares, which the Elsam shareholders have acquired using their pre-emption rights from the so-called "Hobro-Consortium", corresponding to close to 16 per cent of the shares in Elsam. The price offered will be DKK 930 per share of a nominal value of DKK 100.
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