Fortum agreed to pay around €2.3 billion ($2.5 billion) for a majority stake in German power generator Uniper, the Finnish company announced on Tuesday.
Fortum, which also operates power plants in Russia, agreed to acquire all shares held by funds managed by Elliott and Knight Vinke, according to Fortum's statement.
As part of the deal, the Finnish company will pay €29.93 per share for the combined stake of 20.5% held by the two funds raising its share in Uniper to over 70.5% from 49.99%.
The company expects to close the transaction by the end of the first quarter of 2020.
The transaction is subject to customary regulatory clearances in Russia and the U.S., although no further European Commission (EC) clearance is required as Fortum already received unconditional merger clearance from the EC last year.
"Fortum is in discussions with the Russian state authorities and has made a preparatory filing to the Russian Federal Antimonopoly Service," the statement said.
"When Fortum first announced its investment in Uniper in 2017, it said that together the companies would not only create value for all stakeholders but could also take a leading role in the European energy transition.
"The portfolios of Fortum and Uniper are synergistic in Sweden and Russia, while the investment in Uniper offers Fortum access to Germany and other continental European markets where the two companies have very little overlapping businesses," the statement read.
By Firdevs Yuksel
Anadolu Agency
energy@aa.com.tr