Berlin to acquire 99% of Uniper as major energy company trades hands

The German government will spend €8 billion to acquire 99% of the shares of ailing gas giant Uniper after agreeing with the Finnish government, whose state-company Fortum is a major shareholder.

The nationalisation of Uniper, once created as a bad bank to concentrate fossil assets of E.ON, follows repeated attempts by the German government to keep it going.

Bleeding tens to hundreds of millions of euros per day as contracted gas flows from Russia stopped coming, Berlin offered credit lines and created a gas levy to mutualise the costs of keeping business running. Now, the government is undertaking the country's largest ever nationalisation.

"The German government will strengthen its engagement at Uniper," explained Robert Habeck, vice-chancellor and minister of economy.

"Uniper has a 50% share of Russian gas and a 40% share in the German market," he added.

The nationalisation will see the government invest €8 billion through a capital increase, spending €1.70 per share. Another €500 million will be spent purchasing Fortum’s shares.

Berlin will replace Fortum’s cancelled €4 billion shareholder loan and €4 billion in credit guarantees.

Finnish pundits and opposition politicians have not been enthused about their state-owned company being displaced, noting a “hostile” environment. Fortum, a Finnish state-owned company, previously held 78% of Uniper’s shares, which it had purchased for about €6.5 billion.

Uniper itself appeared content with the government's buy-in.

“Today's agreement provides clarity on the ownership structure, allows us to continue our business and to fulfil our role as a system-critical energy supplier,” explained Uniper CEO Klaus-Dieter Maubach.

Maubach cited “the backdrop of the further intensification of the energy crisis” as to why the stabilisation measures worth €15 billion announced in July were insufficient.

Berlin bails out Uniper for €15 billion

The German government has announced that it will bail out Uniper, one of the world’s largest gas importers, who had been hung out to dry by Russian gas supplier Gazprom, for €15 billion.

Side agreements

One new wrinkle in the agreement is a limited right of first purchase if Uniper decides to sell the “Swedish hydro or nuclear business.” Then, former owner, Fortum, is free to decide whether to purchase the installations. This right will be limited until 2027.

“Uniper currently has no intention to sell those businesses,” Uniper said in a statement.

Uniper must also drop its lawsuit against the Netherlands. The company made headlines when it leveraged the Energy Charter Treaty, designed to safeguard energy investments, against the Dutch coal exit.

Additionally, the European Commission’s competition authority must give its consent. The German government expects this to take three months,. the minister noted.

Critics: Finland in 'hostile' environment over Germany's Uniper nationalisation

The news that the German ailing energy giant Uniper may be nationalised has rallied the Finnish opposition, and the government is being criticised for surrendering to Germany without proper resistance.

The state-owned (51%) Finnish energy company Fortum is the majority owner …

[Edited by Alice Taylor]