Status: 12/16/2022 1:24 PM
Germany is allowed to largely nationalize the ailing energy group Uniper. The EU Commission approved it today. Saving the utility threatened by bankruptcy will cost several billion euros.
The EU Commission has approved the acquisition of the energy companies Uniper and Sefe (formerly Gazprom Germany) by the German government. Both companies have entered into difficulties due to the ongoing European energy crisis and in particular due to the cessation of supplies of Russian gas and the sharp increase in gas prices, the Brussels authorities said. The respective nationalization would also not give “any reason for competition law concerns”.
Now Uniper shareholders have yet to accept the bailout. They will decide in an extraordinary general meeting on Monday how to proceed with the energy supplier. The bailout of Uniper is likely to cost the German state billions: it is currently assumed that the German state will have to pay around 30 billion euros.
The rescue package provides for a capital increase of eight billion euros and the acquisition of the shares of Uniper from Fortum. The federal government is expected to pay a unit price of €1.70 for 98.5% of the shares, which would mean the company would be almost completely nationalised. Uniper also secured a capital injection from the federal government in November.
Important for the German energy supply
The gas wholesaler, which is heavily dependent on Russia, is a supplier of more than 100 municipal utilities and large companies, and thus plays a central role in Germany’s natural gas supply. Uniper’s insolvency would probably have triggered a domino effect which would also have caused major difficulties for many Uniper customers.
Uniper has run into trouble due to a freeze on deliveries of Russian gas as gas prices have multiplied. The company has to buy the missing gas from Russia at high prices on the gas market to fulfill its supply contracts on even more favorable terms, which leads to liquidity problems.
Nationalization of Gazprom Germany
Gazprom Germany was a subsidiary of the Russian group Gazprom. In April, the federal government placed the company under trusteeship by the Federal Network Agency. The name was then changed to Securing Energy for Europe (Sefe). In November, the Federal Ministry of Economy announced the nationalization to avoid the imminent insolvency of Sefe.
In both cases, the federal government had argued that the companies were central to Germany’s energy supply. In future, the Federal Ministry of Finance will be responsible for Uniper and the Federal Ministry of Economic Affairs for Sefe. The EU Commission also justified the approval of the nationalization with the fact that the respective ministries “are not currently active in the same markets or in vertically connected markets” and therefore no antitrust problems would arise.
