Danske Commodities (DC) announced today that it has been acquired by Equinor − the Norwegian multinational energy company − for EUR 400 million, with smaller contingent payments depending on Danske Commodities’ performance over the next couple of years. The acquisition combines Danske Commodities’ leading market presence and expertise in energy trading with Equinor’s leading position in gas, growing portfolio in renewables and strong balance sheet.
The transaction supports Equinor’s move from being an upstream oil and gas company to becoming a broad energy company. Equinor is building a material industrial position in profitable renewable energy, and expects to invest 15-20% of its capital expenditure in new energy solutions by 2030. The transaction will enable both Equinor and Danske Commodities to create value along the full electricity value chain and provide Danske Commodities with a partner that supports its growth plans.
“Danske Commodities’ trading platform and geographic footprint will support our strategy through leveraging DC’s material trading position in electricity and natural gas. Their success has been due to their agility, entrepreneurialism and speed to market. We look forward to welcoming their talented workforce to the Equinor group,” says Jens Økland, Equinor’s executive vice president for marketing, midstream and processing.
“This transaction will strengthen our ability to capture value from our current and future equity production of renewable electricity and supports our aim to grow in new energy solutions. We see excellent opportunities to develop our collective understanding of various national markets in a world where renewables to a larger and larger degree will be exposed to market risk,” said Irene Rummelhoff, Equinor’s executive vice president for new energy solutions.
Danske Commodities was founded in 2004 and is headquartered in Aarhus, Denmark. It trades power and gas in 37 countries and has more than 6,000 MW of renewable and conventional assets under management in eight countries. In 2017, Danske Commodities reported a 79% increase in EBT to EUR 60 million — a record result for the company — on revenue of EUR 5,472 million (up 65%).
“Danske Commodities pioneered short-term energy trading. Now, 14 years into our journey, our business is stronger than ever,” said Danske Commodities CEO and founder Henrik Lind.
“Looking ahead, we see energy trading becoming more like the financial markets. The growth of renewables and the increasing electrification of the energy system will drive higher liquidity and lower trading margins. The winners will be those that can significantly scale their volumes while lowering their cost per trade and building capabilities to handle the exponential growth in data.
“The acquisition marks an exciting new chapter in Danske Commodities’ growth story. Under Equinor’s ownership Danske Commodities will benefit from a stronger financial position and a portfolio of gas and renewable assets across Europe that can be optimised in the short-term dynamic market and give us further trading opportunities. We will have an owner with big ambitions in renewables that can accelerate our ability to scale and make investments, and whose values and people are a strong match and fit with our own.”
Henrik Lind will continue to lead Danske Commodities as CEO for at least 12 months after the transaction closes; the senior management team will remain in place, ensuring continuity for customers, employees and counterparties.
Closing is subject to certain conditions, including European Commission approval.