Germany’s EON inks sale of fossil fuels stake

Frankfurt am Main (AFP) – Germany energy giant EON said it has agreed to sell its remaining stake in fossil fuels spinoff Uniper to Finland’s Fortum Oyi in early 2018.

Fortum will offer all Uniper shareholders 22 euros ($25.90) per share, valuing EON’s 46.65-percent holdings at 3.76 billion euros ($4.4 billion), the German group said in a statement late Tuesday.

The two groups had announced last week that they were seeking a deal.

Under the terms of the agreement, if EON decides not to sell its stake after all, it will buy up all the shares Fortum acquires during the offer and also pay compensation to the Finnish firm.

But EON has made clear that it wants to dispose of its remaining stock in Uniper — which owns all its traditional gas- and coal-fired power stations — early next year.

“We welcome Fortum’s offer as an opportunity for Uniper shareholders to sell at a valuation level that reflects Uniper’s strong performance since its spin-off,” EON chief executive Johannes Teyssen said in the statement.

EON, one of Germany’s four largest energy companies, spun off its coal and gas power plants into Uniper in 2016 before floating it on the Frankfurt stock market.

The parent company has retained control of its gas and electricity grid businesses, renewable plants and customer service.

EON booked charges of 11 billion euros in its accounts for last year as it wrote down the value of the fossil fuel assets.

The group’s move came as German energy utilities face tough choices during the government-spurred “energy transition” from fossil and nuclear generation to renewables.