Finland's Fortum edges closer to takeover of Germany's Uniper

Marco Green
September 27, 2017

Finnish power utility Fortum (OTCPK:FOJCF) says it has launched an €8.05B ($9.5B) takeover offer for Uniper (OTC:UNPRF) after securing an agreement from E.ON (OTCPK:EONGY), the German utility's biggest shareholder and former parent company.

Fortum said it signed a deal with E.ON to acquire about 46 percent share of Uniper stock.

"This investment will strengthen the position of both companies to advance Europe's energy transition".

Germany's second largest energy company has been seeking a buyer for its Uniper stake ever since it spun off its traditional gas- and coal-fired power stations in 2016.

Fortum, which is offering €22/share, would be obliged under German takeover rules to launch a bid if it acquires E.ON's stake as it would then own more than 30% of Uniper. Fortum agreed to buy E.ON's 46.65% stake in Uniper, bringing E.ON proceeds of EUR3.76 billion. The offer is unconditional on a minimum acceptance level.

Fortum CEO Lundmark told the media last week that Fortum had suggested to Uniper earlier in the summer that Fortum and Uniper could combine their businesses, but Uniper had rejected the offer.

Uniper chief executive Klaus Schaefer told Reuters on Monday he viewed Fortum's approach as hostile, saw no strategic fit and voiced doubts about how Fortum would fund a deal.

"I understand him (Schaefer) very well".

Lundmark said Fortum is not planning to conquer Uniper.

"Fortum fully acknowledges the integrity of existing employee rights and has no intention to cause Uniper to implement forced redundancies in connection with the discussed transaction or for Uniper to change its corporate seat", it said.

State-controlled Fortum is focused on carbon-free power generation, mainly in the Nordic region and Russian Federation, and has been looking for a deal since selling its power distribution grids for 9.3 billion euros in 2014 and 2015.

Other reports by Click Lancashire

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