Germany agrees to bail out energy giant Uniper as Russia squeezes gas supplies

Germany on Friday agreed to bail out Uniper with a 15-billion-euro ($15.24 billion) rescue deal, as the embattled energy company becomes the first major casualty of Russia’s natural gas squeeze.

The bailout package will see the German state take a 30% equity stake in Uniper.

The energy company was the first in Germany to sound the alarm over soaring energy bills and submitted a bailout application for government support earlier this month. As Germany’s biggest importer of gas, it has been hit hard by vastly reduced flows via pipelines from Russia, which has sent prices soaring.

In a statement, Finnish majority-owner Fortum said Uniper and the German government had agreed on a “comprehensive stabilisation package” to provide it with financial relief.

“We are living through an unprecedented energy crisis that requires robust measures. After intensive but constructive negotiations, we found a solution that in an acceptable way met the interest of all parties involved,” Fortum’s President and CEO Markus Rauramo said in the statement.

“We were driven by urgency and the need to protect Europe’s security of supply in a time of war.”

Russian gas supplies to Europe have fallen since its unprovoked invasion of Ukraine earlier this year — and the subsequent sanctions placed on Moscow by the West.

Uniper has received only “a fraction of its contracted gas volumes” from Russian gas giant Gazprom since mid-June, according to Fortum, meaning it has had to buy gas at much-higher spot market prices. This has had severe consequences for Uniper’s financial position, Fortum added.

— CNBC’s Sam Meredith contributed to this report.