Fortum intends to become a major shareholder in Uniper

– to launch public takeover offer if agreement reached with E.ON regarding its 46.65% share in
Uniper

Fortum Corporation notes Bloomberg’s article earlier today regarding a
potential transaction concerning E.ON SE’s stake in Uniper SE, Fortum says in a press release.

Fortum confirms that it is in advanced discussions with E.ON concerning E.ON’s
46.65% stake in the Germany-based international energy company Uniper. In
relation to these advanced discussions, certain questions are currently being
clarified with the authorities by E.ON. Any agreement between the parties will
be subject to the required internal approvals of both parties. It is not
certain that the discussions will result in an agreement.

Should Fortum reach an agreement with E.ON, Fortum would make a voluntary
Public Takeover Offer (“Offer”) to all shareholders of Uniper under the German
Securities Acquisition and Takeover Act. E.ON could tender its stake of 46.65%
in Uniper into the Offer in early 2018.

It is currently considered that under such Offer by Fortum, Uniper
shareholders, including E.ON, would receive a total value of EUR 22 in cash per
share. The Offer would not be subject to any minimum acceptance threshold. Any
Offer would be subject to customary regulatory approvals.

The total value of EUR 22 per share to be received by Uniper shareholders
pursuant to the Offer corresponds to a total equity value of approximately EUR
3.76 billion for E.ON’s 46.65% shareholding in Uniper and of EUR 8.05 billion
for 100% of Uniper’s outstanding share capital.

If the Offer is launched as currently contemplated, Uniper shareholders would
have the opportunity to realise attractive and certain value by tendering their
shares. The total value implies a premium of 36% to the price prior to intense
market speculation on a potential transaction at the end of May, as well as a
120% premium to the initial trading price post spin-off of EUR 10.

“The offer would be an attractive opportunity for Uniper shareholders to
capture the full value of their investment,” said Pekka Lundmark, Fortum’s
President and CEO. «Uniper shareholders could lock in the significant share
price gains related to a significant degree to the prolonged takeover
speculation in recent months.»

The transaction currently under discussion is grounded in a strong strategic
and financial rationale. The investment would deliver on Fortum’s previously
announced, disciplined capital redeployment strategy and investment criteria.
Uniper’s businesses are well aligned with Fortum’s core competencies, are close
to Fortum’s home markets and are highly cash generative.

“Uniper’s stated role as the provider of security of supply would be an
excellent match with Fortum’s ambition to accelerate the energy transition with
increasing renewable generation and innovative solutions. Both are needed to
make the change happen and each plays a crucial part as Europe transitions from
a conventional to a cleaner and more secure energy future,» said Pekka
Lundmark.

The businesses and competencies of Fortum and Uniper are highly complementary.
Uniper’s production portfolio in Sweden is mainly based on CO2-free hydro and
nuclear power, and is therefore an excellent fit with Fortum, one of the
cleanest power producers in Europe. In Russia, Uniper’s production fleet, like
that of Fortum’s, is largely based on highly efficient gas-fired generation. In
Continental Europe, Uniper has a technologically advanced, flexible and highly
cost-efficient generation portfolio predominantly based on gas, coal and
hydropower. Uniper’s power plants and gas assets have an essential role in
providing security of supply and affordable energy as Europe transitions
towards low emission energy. In addition, Uniper has extensive commodities
trading activities that are complementary to the power generation business. The
commodities business also includes sizeable gas storage and long term contract
portfolios that play a key role in ensuring security of supply.

In 2016, Uniper’s sales totaled EUR 67.3 billion and adjusted EBITDA EUR 2.1
billion. The group’s consolidated power generation capacity totaled 38
gigawatts and power production 139 terawatt-hours. The company employs around
13,000 people.

Fortum confirms that it previously proposed to Uniper management a full
business combination agreement, including commitments to protect the interests
of Uniper’s key stakeholders. As Uniper has stated its intention to remain
independent, in the transaction currently under discussion, Fortum would focus
on being an active, supportive and reliable shareholder of Uniper and a
constructive strategic partner to Uniper, its management and employees,
provided that an agreement with E.ON  can be reached and the Offer would be
consummated, with E.ON deciding to tender its stake.

Fortum acknowledges that the dedication of the Uniper workforce is the
foundation for the current and future success of Uniper’s operations. As a
strategic investor and responsible major shareholder in Uniper, Fortum would be
committed to protecting the interests of Uniper’s employees and other
stakeholders.

Fortum fully acknowledges the integrity of existing employee rights and has no
intention to cause Uniper to implement forced redundancies in connection with
the discussed transaction or for Uniper to change its corporate seat away from
Düsseldorf, Germany.

“We intend to be a long-term investor in Uniper and we take our responsibility
to all stakeholders very seriously,” said Pekka Lundmark. «We are convinced
that a close cooperation of the two companies would render significant benefits
for all stakeholders as there are many strategic and operational touchpoints
between the portfolios of Fortum and Uniper. We hold Uniper management in high
regard and, if a transaction is agreed with E.ON, are looking forward to
discussing with Uniper management how our commitments can be adequately
formalised.”

As of today there can be no certainty whether discussions with E.ON will result
in an agreement and hence whether an Offer will be launched. Fortum will not
speculate on the timetable or the outcome of the discussions with E.ON. Fortum
will make further announcements only if and when appropriate.

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