German government nationalized energy company Uniper, whose financial structure deteriorated

In the statement made by the German Ministry of Economy and Climate Protection, it was stated that the German government will transfer 8 billion euros of capital to the energy company Uniper, and that the government will receive Fortum’s 77.9 percent stake in Uniper for 1.70 euros per share.

In the statement of the ministry, it was emphasized that after the completion of the capital increase and share purchase, the government will own approximately 99 percent of Uniper, thus securing the energy supply for households and companies.

Uniper, Germany’s largest importer of Russian gas, was unable to obtain sufficient supply from Russia, and had to sell the gas it bought at higher prices from the markets to its customers at very low prices, within the scope of the agreements made before the crisis, and thus fell into a financial difficulty.

Finnish public company Fortum bought 46.6 percent of Uniper’s shares from energy company Eon in 2018, and then increased its share to 77.9 percent in the process until the bailout talks.

German labor unions opposed Fortum’s acquisition and majority ownership of Uniper, calling for the Berlin government to buy back a majority stake in the company, arguing that the company’s interests did not align with those of its employees.

ENERGY CRISIS

Russian energy company Gazprom reduced its daily natural gas shipment capacity to Europe via the Nord Stream pipeline to 20 percent on July 27 and stopped it completely at the beginning of September.

Germany, which is the largest economy in Europe and heavily dependent on Russia for energy imports, faced an energy crisis after Moscow’s decision to stop gas flow through the Nord Stream 1 natural gas pipeline.

As concerns over the Russia-Ukraine war continue to put upward pressure on energy prices, the German government is trying to develop policies to ensure that the wheels of industry turn, electricity supply is not interrupted and homes are heated this winter.

The increase in the country’s energy costs fuels inflation and increases the pressure on households and companies.