OSLO, MOSCOW (Reuters) - Russia approved Finnish utility Fortum’s (FORTUM.HE) plan to increase its stake in Germany’s Uniper (UN01.DE), the head of Russia’s anti-monopoly service (FAS) and the company both said on Thursday.
The deal will only come into effect after legislative amendments, said FAS’ head Igor Artemyev.
The deal would bring Fortum’s total stake to more than 70.5%. Its ownership of Uniper had been capped at 49.99% by Russian regulators due to a strategic water license operated by the German firm’s local subsidiary Unipro (UPRO.MM).
“The Russian Government Commission for Monitoring Foreign Investments has today approved, subject to certain conditions, the closing of Fortum’s acquisition of Uniper SE shares,” Fortum said in a statement late on Thursday.
Fortum had been waiting for Russia’s approval after agreeing the share acquisition from funds managed by Elliott Management Corporation and its affiliates and Knight Vinke Energy Advisors Limited and its affiliates.
“To Fortum’s understanding the details of the decision and the relevant conditions will be clarified by the FAS within approximately 10 days,” Fortum said.
After that period Fortum will be able to share more details about the process, the company added.
The closing of the transactions is also subject to customary merger control clearances in Russia and the United States. Fortum expects to be able to close the transactions by the end the first quarter 2020.
On Oct. 8, Fortum announced that it has agreed to acquire all the Uniper shares held by Elliott and Knight Vinke, a total in excess of 20.5%. Upon closing, the transactions will increase Fortum’s share in Uniper to more than 70.5%.
Uniper has long been opposed to a full takeover by the Finnish firm and its Chief Financial Officer Sascha Bibert told analysts earlier this week that as Fortum had not yet had a majority stake, the firm would continue to drive its strategy as an independent company.
Uniper deliberately obstructed Fortum’s proposed purchase of a stake in the German utility by registering assets in Russia as strategic, Kommersant daily quoted Fortum CEO Pekka Lundmark as saying in late October.
Fortum has said it would be possible to divest Unipro’s strategic operations to facilitate the deal.
Editing by Mark Potter and Lisa Shumaker