Germany is to nationalize gas giant Uniper in an effort to secure energy supplies amid the war in Ukraine.
The deal will see the German government take on a 98.5% stake in the firm at a cost of €8.5bn (£7.4bn).
Germany is Europe’s biggest importer of Russian gas, and has been particularly squeezed as Russia has reduced supplies in recent months.
Chief executive Klaus-Dieter Maubach said the deal would help Uniper’s role as “a system-critical energy supplier”.
Before Russia’s invasion of Ukraine it supplied Europe with about 40% of its natural gas, and has responded to Western sanctions by gradually cutting off supplies.
At the start of this month, it halted supplies through the Nord Stream 1 pipeline, claiming repairs were needed – but later said supplies would not resume until sanctions were lifted.
Uniper is the biggest buyer of Russian gas in Germany. In recent months it has had to replace Russian supplies with alternatives from the open market, where prices have soared.
Uniper’s Finnish owner Fortum said the company has accumulated close to €8.5bn (£7.4bn) in gas-related losses “and cannot continue to fulfill its role as a critical provider of security of supply as a privately-owned company”.
“The role of gas in Europe has fundamentally changed since Russia attacked Ukraine, and so has the outlook for a gas-heavy portfolio,” Fortum chief executive Markus Rauramo said in a statement.