Fortum Removal of Uniper’s Top Brass Paves Way for Full Takeover

Fortum Oyj may be heading for a full takeover of Uniper SE as soon as next year after ousting the German utility’s top two executives, according to people familiar with the matter.

The unexpected departure Monday of Uniper Chief Executive Officer Andreas Schierenbeck -- more than a year before his contract was due to end -- has highlighted Helsinki-based Fortum’s impatience in putting its own strategy to work following a long-running, fractious takeover battle.

By installing its own team, Fortum intends to accelerate the integration of the businesses. The Finnish utility agreed last year on a joint strategy to push into low carbon energy, but it was unhappy with the speed of development, according to the people, who declined to be identified because the matter is private.

Fortum Removal of Uniper’s Top Brass Paves Way for Full Takeover

New management could make it easier for the Finnish company, which owns 75% of Uniper, to buy out minority shareholders under a so-called domination agreement, a pact that gives an acquirer wide-ranging control over a target under German law. Fortum ruled out such an agreement or a squeeze-out until the end of 2021. No decision has been taken for the time thereafter, it said.

Under Schierenbeck’s management, Uniper had started aligning its business with Fortum’s. The German company, heavy on coal generation, has shifted its growth strategy to cleaner sources of energy, such as natural gas and hydrogen.

The change in management implies “more operational control by Fortum increasing confidence that the envisaged Uniper-related synergies will be delivered and might even be surpassed”, Barclays said in a report on Tuesday. “More importantly, it increases the likelihood of potentially even bigger changes at Uniper, which might include portfolio optimization.”

Klaus-Dieter Maubach -- a member of Fortum’s Board of Directors -- was appointed as Uniper’s new CEO. Tiina Tuomela, head of Fortum’s eneration division, becomes Chief Financial Officer replacing Sascha Bibert. Fortum CEO Markus Rauramo becomes the new chair of Uniper’s Supervisory Board.

What Bloomberg Intelligence Says:

“The appointments were unexpected given a management shakeup in 2019, yet we believe they may accelerate the integration of the two. The move could also prompt asset sales.”
-- Elchin Mammadov, BI utilities analyst

Click here to read the research.

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