Germany working on historic takeover of three gas companies

Move will mark clear escalation in European response to energy crisis

Germany is in advanced talks to take over Uniper and two other large gas importers in a historic step to avoid a collapse of its energy market, according to people familiar with the matter.

State ownership of Uniper, VNG and Securing Energy for Europe, formerly Gazprom Germania, is the main solution under discussion, the people said, declining to be identified because the information is private. The exact specifics have yet to be agreed but a conclusion could be reached in the coming days, the people said.

Surging gas prices and Moscow’s move to squeeze supplies to Europe have already prompted a series of government bailouts and rescue loans. But those measures are increasingly dwarfed by the scale of the crisis and there’s a risk that systemic energy providers collapse without more robust government support. A co-ordinated swoop on the three firms would mark a clear escalation in Europe’s response to the economic war being waged by Russia.

With Russia’s main pipeline to Germany cut off, Uniper is having to source alternative supplies and it’s racking up losses of as much as €100 million a day, according to its chief executive.


Uniper and SEFE didn’t immediately respond to requests for comment. Fortum Oyj, Uniper’s largest shareholder with a 78 per cent stake, said it couldn’t comment while negotiations are under way. Spokespeople for the German economy ministry and VNG declined to comment.

Asked about nationalisation plans, German economy minister Robert Habeck said: “Things are complex, we are working it through very carefully.”

One of those complications is the Finnish utility Fortum, which still owns a majority of Uniper. It has already granted loans to its unit but made clear earlier this year it didn’t want to keep extending credit. The government has already agreed to take a 30 per cent stake in Uniper.

VNG, which supplies gas to about 400 municipal utilities and industrial operators, submitted an application for state aid last week. The extra cost for it to replace Russian flows to fulfil its own contracts is projected to balloon to €1 billion this year, its parent company EnBW said.

Taking ownership of SEFE is also tricky as there’s a risk of channelling funds to Moscow. In July, German officials opened the door to nationalising SEFE, passing a law that allows the government to take a stake in companies in its trusteeship against the will of their owner.

In SEFE’s case, which has been in trusteeship since April, the owner is an unclear Russian entity called Joint Stock Company Palmary, to which Gazprom gave the subsidiary in April. However, the law may require the German government to provide compensation to the former owner. — Bloomberg