Fortum agrees to acquire majority in Uniper to improve stability and accelerate realisation of strategy
On 8 October 2019, Fortum entered into agreements to acquire all the shares held by funds managed by Elliott Management Corporation and its affiliates (“Elliott”) and Knight Vinke Energy Advisors Limited and its affiliates (“Knight Vinke), a total in excess of 20.5%. Fortum will pay approximately EUR 2.3 billion for the combined shareholding, corresponding to EUR 29.93 per share. Upon closing of the transactions, Fortum’s share in Uniper will increase to more than 70.5% and the total investment in Uniper to approximately EUR 6.2 billion, representing an average acquisition price of EUR 23.97 per share.
It has been Fortum’s preference to agree with Uniper on a joint path forward, yet discussions have each time ended short of actions. Fortum is convinced that this change in Uniper’s ownership structure as well as a resolution of the complex relationship between all parties will return stability and put focus solely on the business and the opportunities available to us.
“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. For Fortum’s shareholders this transaction will be earnings accretive. As always, this investment follows our prudent investment criteria to add value reflecting carefully managed risks,” says Pekka Lundmark, Fortum’s President and CEO.
“The energy transition will require significant investments in the coming decades not only in renewables, but also in gas, energy storage, and other flexibility solutions to provide security of supply and to decarbonise also industry, transportation, heating, and cooling. We see an ideal match of our complementary competences. With an aggregate EBITDA of approximately EUR 3 billion, Fortum and Uniper will be in a strong position to capture the growth opportunities presented by these changes – provided that we work in full alignment,” says Pekka Lundmark.
Read more: Stock exchange release 8 October 2019, Fortum agrees to acquire majority in Uniper to improve stability and accelerate realisation of strategy
Why is Fortum investing in Uniper?
As we have consistently said since we first announced our interest in Uniper, Fortum is committed to the energy transition, but we all understand that it will not happen overnight. While we are focused on leading the transition to cleaner energy, we also understand that we have to meet the needs of our customers in terms of security of supply and affordability. And that’s where Uniper comes in, because we can’t just fast forward to the future. With the planned European coal phase out, coupled with Germany’s 2022 nuclear stop-date, Uniper’s gas-fired generation will have an important role to play in providing security of supply for the increasing share of renewables in the system.
While Uniper mainly stands for coal and gas in Germany, it has in Sweden sizable hydro capacity that complements the growing share of wind in the Nordics as well as CO2-free nuclear, which is an important base-load provider and one of our core competencies.
We expect a good return on our investment, and we believe that we can achieve even more benefits by working together with Uniper. At the same time, we want to be able to pay a good dividend to our shareholders.
That is why we invested in Uniper. Because together, Fortum and Uniper have a good strategic mix of assets - both clean and secure - as well as the expertise required to successfully and affordably drive Europe’s transition.