EU clears German energy giant nationalization – Reuters

Uniper was brought to the brink of bankruptcy over halted gas deliveries from sanctioned Russia

The European Commission (EC) has approved the takeover of struggling gas importer Uniper by the German government, Reuters reported on Friday.

The acquisition was reportedly approved under the EU merger regulation after the conclusion that the proposed takeover would raise no competition concerns. The commission also still needs to approve Uniper's bailout under state aid rules, which will essentially mean a full nationalization, writes Reuters.

“The transaction was prompted by the ongoing European energy crisis, in particular the cessation of Russian gas deliveries and the sharp rise in gas prices, which resulted in Uniper, Germany's largest importer of Russian gas, requiring significant capital injections to prevent its insolvency,” the Commission was quoted as saying.

Next week at a planned extraordinary shareholder meeting, Uniper's investors are expected to approve of the company’s bailout, which is expected to cost more than €51 billion ($54 billion).

Germany's top gas trader, Uniper, has suffered one of the biggest losses in the nation’s corporate history due to skyrocketing energy prices and halted gas flows from its main supplier, Russia. The government has rushed to rescue Uniper to avoid a domino effect across the country’s energy sector.

READ MORE: EU gas giant reports €40 billion loss

Last month, Uniper said that it was seeking billions of euros in compensation from Russia's Gazprom for undelivered natural gas, and has opened an arbitration process. Gazprom Export said that it did not recognize the violation of contracts or the legitimacy of the stated claims for damages.

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