What happened? According to an article in the FT on Sunday, Fortum is looking at buying German utility Uniper''s Nordic assets, which include stakes in nuclear and hydro plants in Sweden. Fortum declined to comment on what it described as rumours . BNPP Exane View: This is not as new news as it may seem. It was already well-known that Fortum has a right of first refusal on these assets running until the end of 2026, and the notion of acquiring them has been discussed for some time (including on the recent FY24 conference call). It is also far from certain that Uniper, currently controlled by the German government after a bailout in the wake of the cutoff of Russian gas in 2022, would be willing to sell, something the FT article itself acknowledges. Moreover, there is difficult history to navigate given that an abortive full takeover of Uniper by Fortum ultimately collapsed in late 2022 due to Uniper''s govt bailout, resulting in losses for Fortum shareholders including the Finnish government (which owns 51% of Fortum). The FT article suggests there could be other bidders for Uniper as a whole and/or for the Swedish assets in question. Fortum does have spare balance sheet which could provide headroom for a transaction, though. The FT article mentions a valuation for the assets in question of several billion euros . Our past work on Fortum (eg here) has suggested a major acquisition could drive significant double-digit earnings accretion. The question is whether a transaction will actually happen. We would guess at a small positive share price reaction given the spotlight effect from a credible publication such as the FT, as we think the potential synergies that could be harvested from a local assets deal, as well as EPS accretion potential from using spare balance sheet capacity, probably outweigh the generally dim view many investors would take towards another major MandA move from Fortum. We still see a transaction as far from certain though.