Germany paves way for nationalisation of gas supplier Uniper

The German government and the country’s largest gas supplier Uniper have agreed on a framework to carry out the struggling company’s nationalisation. The agreement means that the government will likely become a majority shareholder at Uniper, with an investment of about 8 billion euros this week, the economy and climate ministry (BMWK) said. Other shareholders gave their consent to the measure – meant to keep the German gas market functioning – after the company lost billions of euros due to the collapse of gas trading between Germany and Russia. The deal’s completion still hinges on approval by the EU, which has to assess its conformity with state-aid regulation, the ministry said. The government and the gas importer decided on a takeover by the state in September already, and coordinated the measure with Uniper’s acting owner, Finnish energy company Fortum. The agreement includes a total capital injection of 25 billion euros, as the ongoing Russian war on Ukraine is likely to keep Uniper “substantially” in the red also in 2023 and 2024, the ministry added. “Uniper is a central pillar of Germany’s energy supply,” the ministry argued, adding that the takeover will give the government control over key aspects of the business, needed to secure supply in the country. The deal comes with “clear conditions” prohibiting bonus and dividend payments for the company, the ministry added.

Uniper has so far covered about 40 percent of Germany’s gas supply and the government plans to take over nearly 99 percent of its shares by increasing the company’s capital stock. The move had become necessary after the stop of gas flows from Russia at the end of August let already high gas prices spike further and worsened the company’s financial situation. Long-term delivery contracts prevented Uniper from passing on price increases to its customers, leading to a loss of 12 billion euros in the firts half of 2022 alone.