1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites
PoliticsGermany

Germany considering Uniper nationalization

September 20, 2022

Uniper's situation has looked increasingly vulnerable following the closure of the Nord Stream 1 pipeline. Previously, Germany's largest importer of natural gas said soaring energy prices had hit the company hard.

https://p.dw.com/p/4H6VV
The logo of energy supplier Uniper is seen before a press conference about the government's rescue plan at their headquarters in Düsseldorf
Uniper's headquarters are in DüsseldorfImage: Ina Fassbender/AFP

Germany is nearing a provisional agreement to nationalize energy company Uniper amid the ongoing fallout from Russia's invasion of Ukraine, according to reports released by Bloomberg and later by other German media. 

A spokesperson for the company on Tuesday said parties involved in discussions were looking at a possible capital injection that would mean the German government taking a significant majority stake in the ailing gas importer.

"As a result it is foreseen that the federal German government would take on a significant majority stake in Uniper," the company said in a later statement, which it was obliged to provide for shareholders' information. "The final agreement is not yet completed."

Finland's Fortum looks set to give up majority stake

Uniper's largest shareholder currently is the Finnish state-owned energy company Fortum. News agency Reuters cited unnamed sources familiar with the negotiations as saying that Fortum's exit from Uniper's ownership structure would be a part of the rescue package. 

According to Uniper, the government rescue would take the form of a capital investment, the second this year, worth around €8 billion, as well as the German government acquiring Fortum's stake in the company. 

Fortum also issued a statement for investors on Tuesday, saying that a part of the rescue would involve ensuring that the Finnish company would recoup capital it had recently plowed into Uniper to keep it afloat. The company said trading in its shares had been suspended pending finalization of the talks, and that it would issue another statement on completion. 

Uniper had already said last week that "talks are under way" on a second capital injection that would result in a "significant majority stake" for the German government. At that time, though, the company spokesman declined to comment on reports of a possible complete government takeover.

A spokeswoman for Germany's Economy Ministry also said that talks were ongoing and "concentrated" but declined to discuss specifics, saying "when they [the talks] are complete, we will provide information on them."

Reuters reported that a finalized deal would likely be announced as soon as Wednesday.

Consequences of Russia's invasion of Ukraine

Uniper's situation has looked increasingly vulnerable ever since Russia's invasion of Ukraine; the German government effectively bought a 30% stake in the company in July in exchange for a capital injection.

At that time, German Chancellor Olaf Scholz said Uniper was in "big trouble" owing to the worsening energy crisis.

The company was one of those involved in building the Nord Stream 2 pipeline, which was not activated after construction and is frozen indefinitely as part of the package of sanctions imposed in response to the invasion. 

But the situation for Uniper became trickier still earlier this month. Russian energy giant Gazprom said gas supplies to Western Europe via the Nord Stream 1 pipeline had completely stopped due to equipment issues, giving no time frame on when it would resume activities.

The ailing energy importer has been burning through cash reserves sourcing gas on the expensive spot market after Moscow slashed flows to Germany, also trying to fill up storage facilities in anticipation of winter shortfalls.

Last month, Uniper said high energy prices and a threat by Russia to cut gas supplies had hit the Düsseldorf-based company hard. It also warned a tough winter lay ahead.

Contentious gas levy thrown into further question? 

A nationalization of Uniper could put in doubt another recent government policy designed to help deal with high gas prices. Berlin announced plans last month for a gas surcharge for consumers of 2.4 euro cents per kilowatt hour of electricity starting in October. This was supposed to help importers like Uniper deal with rising market prices. 

German news agency dpa and other media on Tuesday reported that Economy Minister Robert Habeck, already facing criticism over the proposal, had "financial doubts" about the constitutionality of the levy, and on whether the potential nationalization of Uniper might affect it.

The decision on whether the levy would be legal would however ultimately rest with either the Finance Ministry, or potentially German courts.

The opposition Christian Democrats had already been appealing for the levy to be scrapped. 

The government, meanwhile, had earlier said that it was working on alterations and improvements to the proposal.

msh, jsi/jcg (dpa, Reuters)

While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.