The giant Uniper is being auctioned – Does Fortum have a role anymore?

The German government’s announcement officially kicks off the giant gas and commodity trader Uniperin the sale process is one of the largest deals in the European energy market. Uniper, which made a turnover of 61 billion euros last year, is one of Germany’s largest energy players.

Potential bidders have until June 12 to submit a letter of intent expressing their interest in the deal J.P. Morganille and UBS:llewho have been selected by the German government as trade advisors.

Norwegian energy company Equinor i.e. former Statoil, a US private equity firm Brookfield Asset Managementa Czech multi-billionaire Daniel Kretinsky EPH and Abu Dhabi Investment Company It falls have expressed interest in buying the German energy company, according to Reuters.

So quite a lot has changed since Finland was an energy giant and majority owned by the state Fortum had to give up Uniper in 2022 as part of the company’s rescue package and Uniper was taken over by the German state.

Germany’s support and liabilities rose to more than 50 billion euros in the company at its worst at the end of 2022, when Uniper had to guarantee the price differences of gas derivatives. Germany gave the company 13.5 billion in actual new capital and around 6 billion euros in loans.

The sums well describe the kind of massive problems the company was in when Russia had attacked Ukraine, and Russia did not deliver the agreed gas batches to Uniper and Germany, but the company had to get gas from elsewhere.

In Finland, after the fall of 2022, there have been many discussions about whether Fortum should have held on to its German company after all and whether the company needlessly realized one of the biggest acquisition losses in Finnish industrial history.

Liabilities of tens of billions show that Finland and the company had neither the ability nor the desire to do this.

But the issue has not yet been fully discussed in parliament. The Parliament’s audit committee decided just at the end of March that the committee will prepare a separate report for the plenary session on the state’s ownership control and Fortum’s Uniper transactions. The hearings started already a year ago.

It wouldn’t be a big surprise if the coalition and the Basic Finns tried to ride the Democrats’ bluster.

One can well ask, in such a situation, does Fortum have real opportunities to participate in Uniper’s privatization plans and does it make sense? The quick answer is of course not. Isn’t Fortum’s record net loss of nearly six billion euros a sufficient example that Uniper should not be touched with a stick.

A more thoughtful answer is that you have to look carefully at how privatization is going to be implemented. In connection with the rescue package, it was agreed that if Uniper plans to sell its Swedish water and nuclear power holdings, Fortum has the first right to make a purchase offer for the power plants.

These power plants were originally one of Fortum’s main interests in Uniper.