E.ON Sells Uniper Stake To Fortum for $4.5 Billion

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Germany's E.ON SE (FWB:EOAN) (Düsseldorf) has agreed to sell its 47% share in its fossil-fuel spin-off company Uniper to Finnish energy major Fortum in a deal worth 3.76 billion euros ($4.5 billion).

The deal follows on from Fortum's unsolicited takeover bid in September, which Uniper has repeatedly rejected. E.ON, as the largest single shareholder, had until January 11 to accept the offer of 22 euro ($26) per share--twice what the company was publicly listed for in 2016. Fortum wants to acquire all of Uniper, so the other shareholders have until January 16 to accept the bid.

Uniper was created at the start of 2016 to combine E.ON's conventional power generation, energy storage and global commodities business units, allowing E.ON to focus on the faster-growing and more profitable renewable energy and distribution grids. E.ON floated the company on the stock exchange in late 2016 at a time when it was suffering heavy financial losses in its European power generation and gas storage businesses. For additional information, see September 25, 2017, article - Fortum Makes $9.7 Billion Takeover Bid for E.ON's Uniper and January 6, 2016, article - E.ON Splits Power Business.

E.ON Chief Executive Officer Johannes Teyssen said: "This transaction enables us to sell our entire Uniper stake at an attractive price for E.ON. E.ON will now focus fully on its customers and core businesses in the new energy world. The course has been set for profitable growth."

"We welcome E.ON's decision to accept our offer, which we believe is a fair reflection of Uniper's value and performance since its spinoff from E.ON," added Fortum's president and chief executive officer Pekka Lundmark. "I am convinced that investment in Uniper will deliver an attractive return and support us in accelerating the transition to a clean and secure energy future."

However, Uniper remains opposed to the deal. Klaus Schäfer, chief executive officer, previously stated: "Fortum's offer is unacceptable as it does not reflect Uniper's true value. In addition, there is no recognizable contribution to a better development perspective for Uniper. The offer document also does not clearly state what Fortum's true intentions are. Now begins the time for discussions. We will find out if Fortum is prepared to follow up its public statements with binding commitments. We will hold Fortum to its word to ensure Uniper's independence as far as possible."

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