Finnish Bid

Buying Germany's Smoke Stacks

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Smoke stacks and power lines. Both may end up in Finnish hands. Source: Reuters

It’s been just over a year since Germany’s largest utility E.ON took the daring step of splitting up its business, packing its legacy fossil-fuel assets into a separate company, called Uniper, and selling it off to investors. At the time, it seemed willing to give its smoke-stack filled sibling a chance to make it on its own. Klaus Schäfer, Uniper’s CEO, remembers it clearly: Both companies were offered “a path toward an independent future…both myself and [E.ON. CEO] Johannes Teyssen said this repeatedly before the public offering,” he told Handelsblatt.

That calculation appears to have changed. With climate change driving major consolidation across Europe’s energy sector, Finnish state-owned utility Fortum announced on Wednesday that it is in negotiations with E.ON to acquire Uniper. E.ON confirmed the talks in a rather terse statement of its own.

Uniper’s management, which seems to have been caught off guard by the announcement, has rejected the offer. But that may be little more than posturing. Mr. Schäfer doesn’t really have much of a choice in the matter of who owns his company.

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