German government agrees to nationalisation deal for energy giant Uniper

Uniper has received billions of dollars in financial aid from the German government as gas and electricity prices soared after Russia’s war in Ukraine.

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The German government agreed on Wednesday to nationalize utility Uniper as it struggles to keep the industry afloat after the global energy crisis.

The state, which in July accepted a 15 billion euro ($14.95 billion) bailout deal to bail out the major gas importer, will now buy a 56 percent stake in Finland’s Fortum for 500 million euros. The German government will own about 98.5% of Uniper.

“Since Uniper’s stabilization package was agreed in July, the situation at Uniper has deteriorated further rapidly and significantly; as a result, new measures to address the situation have been agreed,” Fortum announced in a statement Wednesday morning.

Uniper, Germany’s largest importer of natural gas, has been squeezed by a sharp drop in gas flows from Russia, sending prices soaring.

Russia’s state-owned energy giant Gazprom stopped indefinitely sending gas to Europe via the Nord Stream 1 pipeline earlier this month, a move Uniper Chief Executive Klaus-Dieter Morbach told CNBC in a move that would exacerbate the company. the predicament.

Uniper CEO says worst is yet to come after Russia halts gas supplies to Europe

Fortum will unwind the Uniper merger in the third quarter of 2022, the company said on Wednesday, while Fortum’s 4 billion euro loan to Uniper will be repaid and the Finnish company will be released from the parent company’s 4 billion euro guarantee .

“With the current situation in the European energy market, and recognizing the dire situation for Uniper, the divestiture of Uniper is the right step, not only for Uniper but also Fortum,” said Fortum CEO Markus Rauramo.

“Since Russia attacked Ukraine, the role of gas in Europe has fundamentally changed, as has the outlook for heavy gas portfolios. As a result, the business case for consolidating the group is no longer viable.”

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