Finland’s Fortum and Germany’s Uniper are having real boxing match!

The Finnish media and media spin doctors is having a fantastic time with full page advertisements, press releases and long explanations why the Fortum’s attempted take-over of Uniper is “a Great Deal” or “a Terrible Deal”.

Fortum wants to buy  company that they believe has a strong cash flow from energy trading and transmission, as well as power generation from coal, gas, water and nuclear sources in Russia, Germany, Sweden and a few other places. Fortum believes that the fat profits from these activities can allow Fortum to invest and buy green and sustainable energy in the future.

Uniper on the other hand is really angry that Fortum is trying to acquire the whole company and have pointed out that it is a bad fit for both companies. Uniper wants to conquer the rest of the world with fossil fuels and energy trading, rather than being stuck in “a relatively small publicly owned company in Northern Europe”.

Furthermore, Uniper says the following rather nasty things about Fortum:

  1. Fortum is meant to be a green company and should not be buying a dirty fossil fuel based company…
  2. Fortum will have little or no success in dealing with German politicians. Only German management understand how to handle these really difficult people…
  3. Fortum does not have the resources to finance the new NordStream gas pipeline from Russia to Germany…

(NordStream is Russia’s plan to squeeze the Ukraine, by effectively being able to replace the pipeline that goes through Ukraine from Russia with the new gas NordStream pipeline under the Baltic. The EU, Estonia, Lithuania, Latvia, Denmark and Sweden oppose this pipeline, but it looks like Germany makes all the decisions in the EU today.)

The take-over deal appears to be complicated by the fact that Fortum have already agreed to buy 47% of the Uniper, and have made a public offer to buy the rest of the shares for €22 each. That is some €3 lower than the current market price, so it could be tricky to persuade people to give up €3 to what Uniper calls a “hostile buyer”.

Another problem is that Fortum has not really explained what they will do with the fossil and nuclear power plants if they control Uniper. This must then create a lot of uncertainty for current shareholders of both companies. If Fortum does want to be a really green company then these fossil plants must be sold off, but who would want to buy these risky assets – fossil and nuclear plants are not everybody’s favourite assets today, especially in the countries where they are located.

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