Fortum's Uniper investment

Water

Fortum wants to drive the change towards a cleaner world. Change, however, does not happen overnight, it requires persistence. The future energy system must be secure, flexible and clean. Alongside wind and solar energy, we need secure production to ensure the functionality of society at all times. Additionally, we need flexible, adjustable hydropower and gas power to ensure energy availability also when the wind isn’t blowing or the sun isn’t shining.

Fortum is a forerunner in low-carbon energy production, circular economy, and sustainable urban solutions. Uniper is a successful company that owns both secure and flexible production. About half of the company’s production capacity is low-carbon gas power and about 20% is carbon-free hydro and nuclear power.

We expect a good return on our investment, and we believe that we can achieve even more by working together with Uniper. At the same time, we want to pay a good dividend to our shareholders.

In line with our vision, we will continue the work at Fortum for a cleaner world.

We are delighted that Uniper in now committed to a fresh start in order to establish in earnest how the companies can work together strategically and operationally

Pekka Lundmark

President and CEO

Public takeover offer for all Uniper shares

In September 2017, Fortum announced it had signed a transaction agreement with E.ON under which E.ON had the right to decide to tender its 46.65% shareholding in Uniper SE into Fortum’s public takeover offer (PTO). In November 2017, Fortum launched a voluntary public takeover offer to all Uniper shareholders at a total value of EUR 22 per share, implying a premium of 36% to the price prior to intense market speculation on a potential transaction at the end of May 2017. In February 2018, Fortum announced that shareholders representing 47.12% of the shares in Uniper had accepted the offer.

Regulatory approvals

The PTO was conditional to regulatory and merger control approvals in several countries. During the second quarter 2018, Fortum received the required clearances in Russia under the Strategic Investment Law as well as Competition Law. The clearances allow Fortum the acquisition of up to 50% of shares and voting rights in Uniper. During the second quarter, Fortum also received an unconditional merger clearance decision from the European Commission. Clearances in the United States and South Africa had already been granted earlier.

49.99% ownership at year-end 2018

On 26 June 2018, Fortum closed the offer and became the largest shareholder in Uniper with 47.35% of the shares. Fortum paid a total consideration of EUR 3.7 billion for all shares tendered (EUR 21.31 per share). The total consideration was financed with existing cash resources of EUR 1.95 billion and bridge loan financing of EUR 1.75 billion from committed credit facilities. Since June 2018, Fortum has increased its shareholding in Uniper in order to further secure its voting position in any future Uniper General Meeting. On 31 December 2018, Fortum owned 49.99% of the shares in Uniper.

Uniper is reported as an associated company

The share of Uniper’s profit will contribute to the EPS and dividends to the cash flow of Fortum. As a result of this transaction, Fortum’s leverage rose above Fortum’s long-term target level for net debt/EBITDA ratio of around 2.5x. Over time, however, Fortum expects its cash generation in combination with the dividend from Uniper to reduce this ratio towards the stated target.

Fortum has consolidated Uniper as an associated company from 30 June 2018. The total acquisition cost, including direct costs relating to the acquisition, is reported in ‘Participations in associated companies and joint ventures’. The purchase price allocation will be completed within the one-year window from the acquisition date, according to IFRS. As Uniper publishes its interim reports later than Fortum, Fortum’s share of Uniper’s results will be accounted for with a time lag of one quarter, with potential adjustments.

Read more

Online news 6.2.2019: Fortum CEO Pekka Lundmark comments fresh start with Uniper

Online news 12.11.2018: Fortum’s response to environmental organisations’ plea to discontinue the use of coal

Stock exchange release 26 June 2018: Fortum closes Public Takeover Offer on Uniper

Stock exchange release 15 June 2018: Fortum receives merger clearance for Uniper investment in the EU and Russia

Stock exchange release 4 June 2018: Fortum receives clearance for Uniper investment under Russian Strategic Investment Law

Stock exchange release 24 May 2018: Regulatory decisions in Russia on Fortum's Uniper investment possibly delayed

Stock exchange release 28 April 2018: Positive decision in Russia for Fortum's investment in Uniper - key step towards transaction approval

Stock exchange release 21 March 2018: Fortum to support Uniper dividend proposal

Reply to NGOs' open letter regarding Fortum's investment in Uniper

Stock exchange release 7 Feb 2018: The total acceptance of Fortum’s offer on Uniper 47.12%

Stock exchange release 19 Jan 2018: 46.93% acceptance of Fortum’s Uniper-offer - additional acceptance period to commence

Stock exchange release 17 Jan 2018: The initial acceptance period for Fortum's offer to Uniper shareholders ends

Stock exchange release 8 Jan 2018: E.ON tenders its Uniper shares to Fortum's offer

Online news 21 Nov 2017: Comment on the Reasoned Opinion of Uniper published today

Read more on the deal website

Stock exchange release 7 Nov 2017: Fortum has published offer document for Uniper shares, acceptance period has commenced

Stock exchange release 26 Sep 2017: Fortum signs agreement with E.ON

Deal-related materials

Read more about Fortum's strategy