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Fortum says Uniper deal faces roadblock in Russia

Fortum says Uniper deal faces roadblock in Russia
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HELSINKI (Reuters) – Finnish utility Fortum <FORTUM.HE> said on Thursday that Russia’s approval for the company’s planned investment in Germany’s Uniper <UN01.DE> may be postponed due to legislative changes in Moscow.

Fortum has agreed to buy a stake of around 47 percent in Uniper for 3.8 billion euros ($4.5 billion). Both companies have large operations in Russia and Moscow’s approval is considered as the key step in getting the deal done.

State-controlled Fortum said in a statement that ongoing amendments to Russian laws may have an impact on the process, and that it expects the formal approval to take a few more weeks. It had previously estimated it would conclude around late May.

Last month, Russian authorities preliminary approved the deal, but it needs to pass a second stage of scrutiny.

The deal has faced stiff opposition from Uniper management, which has argued the two companies are not a good fit.

Fortum has even accused Uniper of actively working against the deal in Russia, but Uniper has denied that.

Risks in doing business in Russia are a familiar theme for Fortum – a Russian government newspaper last month ran an article that described the company as “a real threat” to Russian security.

However, Fortum on Thursday reiterated that it expects to have all required clearances, including Russia’s, in mid-2018. The deal is also pending the EU’s approval.

($1 = 0.8519 euros)

(Reporting by Jussi Rosendahl; Editing by Alexandra Hudson)

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