Berlin and Finnish company Fortum, which owned Uniper, announced a deal that would leave Germany with a 98.5% stake in the debt-laden natural gas company, Agence France-Presse reports.
“Uniper is a central pillar for German energy supplies,” the Finance Minister said in a statement.
Under the deal, Berlin will give €8bn in cash to Uniper and buy Fortum’s shares for €500m. In addition, Fortum will be paid an €8bn loan it had given to Uniper.
“Under the current conditions in the European energy markets and recognizing the seriousness of the situation at Uniper, the divestment in Uniper is the right step, not only for Uniper but also for Fortum,” said Fortum director Markus Rauramo.
“The role of natural gas in Europe has changed fundamentally since Russia attacked Ukraine, and so has the outlook for portfolios heavily invested in natural gas. As a result, the business case for an integrated group is no longer viable,” said Rauramo.
Uniper, one of the biggest importers of Russian natural gas, has been under pressure as Moscow has cut supplies to mainland Europe following its invasion of Ukraine in February.
Reduced supplies have had to be supplemented by expensive supplies from the open market, where natural gas prices have soared.
Fortum said Uniper has accumulated almost €8.5bn in gas-related losses “and cannot continue to fulfill its role as a critical security of supply provider, as a private company”.
The German state had already agreed in July to take a 30% stake in Uniper as part of an initial bailout deal.
However, Uniper announced earlier this month that the two sides were exploring a possible nationalization as the energy crisis showed no signs of abating.
Fortum provided an €8bn loan to Uniper in January as the price of natural gas had already started to rise amid tensions with Moscow ahead of the invasion of Ukraine.
The Finnish company held a nearly 80% stake in Uniper, which would have been reduced to around 56% under the July rescue plan.
Earlier in September, the German government began talks with another natural gas supplier, VNG, about a potential rescue package.
Russia’s war in Ukraine has jolted European energy markets, increased pressure on suppliers and fueled fears of potential shortages over the winter.
Germany found itself particularly exposed due to its previous heavy reliance on Russian energy imports.
Since the outbreak of war, Berlin has worked to wean itself off Russian gas and secure alternative supplies.
Officials have seized key pieces of energy infrastructure in the hands of Russian energy companies and ordered the filling of natural gas storage facilities.
SOURCE: KYPE-Agence France-Presse