German state to take full control of Uniper in divestment deal with Fortum

ANKARA

Fortum, the German government, and Uniper have signed a new agreement in principle for a long-term solution to allow the German state to take full control of Uniper to secure energy supply in Germany, a statement by Fortum said on Wednesday.

Upon completion, the agreement will enable Fortum to divest Uniper and refocus on clean Nordic power generation as its core business.

It replaces the initial Uniper stabilization agreement between the same parties, signed in July 2022, according to Fortum.

"Since July, the European energy crisis has escalated further and the severity of the situation has made it apparent that the previously agreed stabilization measures are insufficient and difficult to implement," the company said.

As Uniper has accumulated close to €8.5 billion in gas-related losses to date, Fortum said the company is unable to fulfill its role as a critical provider of secure supplies as a privately-owned company. Therefore, the newly found solution involves German state control.

“Under the current circumstances in the European energy markets and recognizing the severity of Uniper’s situation, the divestment of Uniper is the right step to take, not only for Uniper but also for Fortum," Markus Rauramo, CEO and president of Fortum, was quoted as saying.

He explained that the role of gas in Europe has fundamentally changed since Russia attacked Ukraine, as has the outlook for a gas-heavy portfolio, rendering the business case for an integrated group unviable.

“We made choices in the past that we were truly convinced of at the time, based on the available information, market environment and outlook. 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," Rauramo said.