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Fortum purchases majority stake in Germany´s Uniper

08 Oct 2019, 20:24 ( 5 days ago) | updated: 08 Oct 2019, 20:30 ( 5 days ago)

DF-Xinhua Report
File Photo Fortum.

Finnish majority state-owned firm Fortum has entered into agreements to acquire a majority stake in German energy company Uniper, said the Finnish energy giant in a press release on Tuesday.

Fortum has agreed with American investment management firms Elliott and Knight Vinke to buy 20.5 percent of shares in Uniper, raising its share in Uniper from 49.9 percent to more than 70 percent.

The price of the acquisition is about 2.3 billion euros, which increases Fortum's investment in Uniper to approximately 6.2 billion euros.

Fortum said that it would pay for the transaction out of its cash resources as well as credit from Barclays, a British multinational investment bank.

"I am pleased that we have today taken this important step to create a leader in the European energy transition. I am convinced that this will create attractive opportunities for both companies and their employees," said Pekka Lundmark, Fortum's President and CEO, in the press release.

However, closing of the transaction must be approved by customary regulatory clearances in Russia and the United States, and the deal will complete by the end of the first quarter of 2020, noted the Finnish company.

Founded in 2016 and based in Dusseldorf, Germany, Uniper is an energy company that employs about 11,000 employees around the world.

Uniper owns 12 natural gas plants and two large coal plants respectively in the Netherlands and England, as well as nuclear and hydropower businesses in Sweden.

The German firm is one of Russian state energy company Gazprom's partners in the Nord Stream 2 pipeline project, which is planned to pump natural gas from Russia to Germany via the Baltic Sea, reported national broadcaster Yle on Tuesday.

Fortum is held by the Finnish government with 50.76 percent of stake, focusing on generating and selling electricity and heat, as well as waste recycling and other energy-related services and products. Its business largely covers the Nordic and Baltic countries, Poland, Russia and India.