M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Tuesday, January 18, 2011

Icelandic backlash

Clearly since the financial crisis, Iceland has been on its heels.  Dealing with the incredible debt that Icelanders have been left to pay has forced some very difficult decisions on the current government. One of those was the decision to sell HS Orka hf, the state-owned geothermal company to the Swedish energy concern Magma.  The sale was completed on Dec. 23, 2010.  It's hard to really visualize how important Orka is in Iceland.  Think about this:  in Reykjavik, there are no private homes with "boilers" for heating.   That's because Orka runs a centralized geothermal heating system for all the residents of the country's capital city.  Orka is responsible for all the heat and hot water.  It's central to the economic and social life of the country.  

It's no surprise then that the sale of the company to foreigner owners has generated a lot of controversy.  Yesterday, the Icelandic singer Bjork presented the Icelandic PM with a petition calling for Iceland to buy back the company from its new foreign owner. The petition had 47,000 names on it - that's an incredible 15% of that small country's population.  Indications are that the government will respond to the petition by forcing a sale back to the government and keeping the utility in public hands.   



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