Fortum To Take Over Uniper Hoping To Boost Renewables

A two-year drive by energy firm Fortum to acquire control of Germany's Uniper ended Tuesday with the Finnish utility announcing a deal to give Fortum a majority share.

Under the agreement, worth 2.3 billion euros ($2.5 billion), Fortum will raise its Uniper stake to 70.5 percent by buying a 20.5-percent stake held by activist investors Elliott and Knight Vinke, the firm said.

Fortum CEO Pekka Lundmark said the acquisition would allow the company to better transition to cleaner energy production.

"Uniper's gas-fired generation will have an important role to play in providing security of supply for the increasing share of renewables in the system," he said.

Fortum's takeover attempts had been resisted by Uniper's board since 2017.

Fortum announced that it will "not cause Uniper to implement compulsory redundancies" or to relocate away from Duesseldorf as a result of the transaction.

The deal is subject to regulatory approval, including by Russian authorities, who have until now prevented Fortum from owning more than 50% of Uniper due to a Russian water treatment licence held by a subsidiary of the German power generator.

Russian rules forbid foreign ownership of certain key infrastructure.

However, speaking to analysts on Tuesday, Lundmark said "very constructive discussions" with Russian authorities made him believe that approval was now possible.

Uniper is helping finance the Nord Stream 2 gas pipeline, which is also co-funded by Russia's Gazprom.

The Baltic pipeline, which is to bring gas from Russia to Germany, is scheduled for completion in early 2020 although Danish authorities have yet to grant approval for the project to pass through the country's waters.