October 1, 2022

  • Germany nationalizes gas importer Uniper as it seeks to secure energy supplies before winter.
  • The government will spend another 8 billion euros on Uniper, and it previously invested 15 billion.
  • As part of the deal, Germany will buy Finnish company Fortum’s stake in Uniper.

Germany is nationalizing Uniper, its leading importer of Russian natural gas, in a deal that underscores Europe’s energy crisis.

Uniper announced The German government will acquire a 99% stake in the company on Wednesday, after bought a 30% stake in July as part of a 15 billion euro ($14.9 billion) bailout. The latest deal will include a capital increase aimed at securing an additional €8 billion in cash for Uniper, the company said.

Uniper has been struggling since Moscow cut gas supplies to Europe in response to Western sanctions imposed after Russia invaded Ukraine. European natural gas prices have risen by 300 percent this year Dutch TTF futuresthe benchmark price on the continent, rose by 7.2% to 208.40 euros per megawatt-hour on the ICE exchange early Wednesday.

The reduction in supply and the resulting spike in prices meant that Uniper was forced to buy natural gas at higher prices.

“At Uniper we are aware of our responsibility for Germany and Europe,” Klaus-Dieter Maubach, CEO of Uniper it is stated in the announcement Wednesday. “We are committed to doing our part to overcome this crisis and restructure the energy supply in this country.”

In the deal announced on Wednesday, Germany will buy the stake of the Finnish state-owned company Fortum in Uniper for about 500 million euros. Fortum will also be returned to Uniper for a loan of 4 billion.

CEO of Fortum Markus Rauramo said that statement: “The role of gas in Europe has fundamentally changed since Russia invaded Ukraine, as has the prospect of a large gas portfolio. As a result, the business case for an integrated group is no longer viable.”

Uniper shares fell 36% to 2.73 euros in Frankfurt and Fortum shares rose 9.2% to 13.21 euros in Helsinki at 7 a.m. ET.

The German nationalization of Uniper comes as the country tries to secure its energy supplies before winter. Earlier in September, Germany took control of three oil refineries owned by Russian energy giant Rosneft. He also started coal-fired power plants to meet the demand for electricity.

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