PGE Polska Grupa Energetyczna S.A.

M&A Activity • Oct 27, 2020

Submitting of an initial non-binding offer for acquisition of shares inFortum Group's assets located in Poland, Estonia, Latvia and Lithuaniaby a consortium with participation of PGE

The Management Board of PGE Polska Grupa Energetyczna S.A. (the "PGE",the "Company") discloses that on October 27, 2020, an investmentconsortium, a part of which is PGE (the "Consortium"), has submitted aninitial, non—binding offer to purchase district heating and coolingbusinesses in Estonia, Lithuania, Latvia and Poland from Fortum HoldingB.V. (the "Transaction").

The participants of the Consortium are: PGE, Polskie Górnictwo Naftowe iGazownictwo S.A., PFR Inwestycje FIZ (Closed-end investment fund) whichis managed by Polski Fundusz Rozwoju S.A. (Polish Development Fund) andIFM Investors Pty Ltd.

The consortium will continue to work together towards the submission ofa binding offer.

Transaction's target are Fortum Holding B.V.'s subsidiaries, which carryout activities mainly related to heat generation, distribution and saleas well as electricity generation in Estonia, Lithuania, Latvia andPoland.

The acquisition of the shares in the Fortum Group's assets is in linewith PGE Group's Strategy until 2030 announced on October 19, 2020(current report no. 29/2020 dated October 19, 2020).