Fortum has reached an agreement to sell Uniper to the German state in a bid to shore up its finances and refocus on clean power generation in the Nordic region.
The German government will buy all of Fortum’s shares in Uniper for approximately €0.5bn as well as provide €8bn of financing for the energy firm to help it maintain operations amid tight gas supplies and soaring energy prices.
The agreement will enable Germany’s government to take over Uniper’s role in securing gas supplies for the German market, and replaces a stabilization agreement between Finland-based Fortum and the German state signed in July.
To date, Uniper has accumulated close to €8.5 billion in gas-related losses and “the business case for an integrated group is no longer viable”, said Markus Rauramo, CEO and President of Fortum.
“Under the current circumstances in the European energy markets and recognising the severity of Uniper’s situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum,” added Rauramo. “The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio.”
The agreement includes a clause giving Fortum the right of first offer in case Uniper decides to divest its Swedish hydro and nuclear assets until the end of 2026.
“We made choices in the past that we were truly convinced of at the time, based on the available information, market environment and outlook,” Rauramo said. “In hindsight, some of our strategic choices turned out to become liabilities. We now have to face and mitigate the impact of those decisions.
“While divesting Uniper will be a painful step for the company, its employees and investors, Fortum will be able to look to the future and will focus on its core Nordic business of CO2-free electricity and heat as well as sustainable customer solutions.”