Fortum’s $9.7 billion takeover Offer of Uniper


Overview of the deal

  • Acquirer: Fortum

  • Target: Uniper

  • Estimated value: $9.7bn

  • Announcement date: 7/11/2017

  • Acquirer Advisors: Barclays, Perella Weinberg Partners

  • Target Advisors: Goldman Sachs

It was first announced in September 2017 that Fortum had positioned itself to buy E.ON’s 46.65% stake in Uniper, and in November they launched a public takeover. The deal can be seen as having aspects of both horizontal integration and diversification in that Fortum will absorb Uniper’s current customers in the electricity market while also adding fossil fuel as a new source of its energy production.

The proceedings following Fortum’s announcement have been difficult. Already in September Uniper rejected Fortum buying E.ON’s stake, underlining the deal as a hostile takeover in the public narrative, and offering higher dividends in an attempt to retain shareholders. By February Fortum’s tender bid expired with only 47.12% of shareholders (including E.ON) having tendered their shares. Fortum has stated their commitment to not increase their cash tender offer at $27.1 per share, and expects the bid to close by mid-2018.

The picture is further complicated by activist investors Elliott Management and Knight Vinke having both taken stakes in Uniper, counting for 7.4% and 5.02% respectively. Both oppose the takeover.

ModernPowerSystems emphasises the criticism that this deal faces from Finnish policy makers because of its contradictory notion to Fortum’s efforts to establish itself as a forerunner in clean energy.

Company details (Fortum)

Fortum is a Finnish energy company offering energy production and heating to Europe. It is a major player in the Nordics but also operates in the Baltics, Poland, and Russia. Its products and aim revolves around clean energy and innovative solutions such as waste-to-energy products.

- Founded in 1998, headquartered in Helsinki, Finland

- President and CEO: Pekka Lundmark

- Number of employees: 8,785

- Market Cap: $19.1bn - EV: $21.3BN

- LTM Revenue: $5.64bn - LTM EBITDA: $1.57bn

- LTM EV/Revenue: 3.79x - LTM EV/EBITDA: 13.58x

Company details (Uniper)

Uniper is a german fossil energy producer and provider operation broadly in Europe. It was created through its parent company’s, the energy giant E.ON’s, decision to split its fossil fuel assets into a separate legal entity.

- Founded in 2016, headquartered in Düsseldorf, Germany

- President and CEO: Klaus Schäfer

- Number of employees: 13,000

- Market Cap: $11.0bn - EV: $12.1bn

- LTM Revenue: $89.3bn - LTM EBITDA: $2.00bn

- LTM EV/Revenue: 0.14x - LTM EV/EBITDA: 6.02x