Germany Weighs Full Or Partial Sale Of Uniper Amid Energy Crisis Fallout

Berlin is exploring options to sell its entire stake in Uniper, the $18.8 billion energy utility, following a nationalization during Europe’s energy crisis in 2022. According to sources familiar with the matter, the German government, which currently holds 99.12% of Uniper after taking control of the company, is considering both a partial stake sale of about 25% or a complete exit from the company.

Canadian investment firm Brookfield has been approached as a potential buyer in the event of a full sale, a move that could rank among the largest private equity deals in Europe in recent years, sources say.

Uniper’s near-collapse came after its primary gas supplier, Russia’s Gazprom, drastically reduced and eventually ceased deliveries following the Ukraine war. To prevent a national energy crisis, the German government stepped in to safeguard the security of the country’s energy supply.

The country’s Finance Ministry, which oversees the Uniper stake, confirmed that it is exploring all options for reducing its holding but has yet to make a final decision on timing and structure. The ministry emphasized that the preferred approach remains a re-IPO, where shares would be sold through the equity market.

While neither Uniper nor Brookfield provided comments, the ongoing discussions come as Germany gears up for a snap election next month. The future government will likely face pressure to address the Uniper stake, as EU regulations mandate that Berlin reduce its ownership to a maximum of 25% plus one share by 2028.

Despite Uniper’s current valuation at €18.4 billion ($18.8 billion), the sale of any stake may come at a discount, as the company’s limited free float might not fully reflect its actual value, sources suggest.

A major hurdle for the deal involves the need for parliament to pass legislation that would allow Uniper to resume paying dividends, a right stripped away as part of Berlin’s €13.5 billion bailout of the company. Although the government initially planned to finalize a deal by spring, the collapse of the current administration has delayed the timeline, with the process likely extending into the summer.

The government is aiming to lift the dividend ban before the election, although this goal is considered ambitious. Any decision, however, is now expected to take shape after the European summer, with deliberations still at an early stage. There remains uncertainty about how the deal will unfold and when it will be completed.

One source pointed out that while a full sale would generate immediate revenue, it would also forgo any future gains from an increase in Uniper’s share price, adding another layer of complexity to the government’s decision-making process.