Finnish energy group Fortum is offering to buy all the shares in German utility Uniper in an 8.05 billion-euro ($9.5 billion) deal that aims to boost Fortum's gas, hydroelectric and nuclear assets.
Fortum is offering to buy the 46.65 percent stake that Germany's E.ON holds and the rest of the shares for 22 euros each. It said Wednesday that the two power groups would complement each other and that it aims to be a "reliable and stable" shareholder.
Uniper's management says it sees Fortum's bid as hostile and doubts the companies fit strategically.
Under German takeover rules, Fortum — Finland's largest power company with major operations in the Nordic countries and Russia — is compelled to bid for all of Uniper's shares once it takes on a stake of over 30 percent.
Fortum CEO Pekka Lundmark denied the hostile intentions and stressed the company — in which the Finnish government has a stake of just over 50 percent — would be happy to buy E.ON's stake only, without taking full ownership of Uniper.
He said the offer should be seen "as an investment into a company in whose management and strategy we believe in." Fortum is not aware of rivaling bids for E.ON shares, Lundmark said.
E.ON has until early 2018 to decide whether to sell its stake. The German utility is unable to dispose the shares earlier for tax reasons.
Uniper operates around 38 gigawatts of power plants in Europe and Russia and had sales of around 67 billion euros in 2016, compared with Fortum's revenue of 3.6 billion euros the same year.