Germany is to nationalise 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 invaded Ukraine it supplied Europe with about 40% of its natural gas, and it has responded to Western sanctions by gradually cutting off supplies.
At the start of this month, Russia halted supplies through the Nord Stream 1 pipeline, claiming repairs were needed – but later said flow would not resume until sanctions were lifted.
Uniper, which operates gas, coal, and hydro plants across Europe and is currently controlled by Finnish state-owned energy company Fortum, 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.
Fortum said Uniper had accumulated close to €8.5bn (£7.4bn) in gas-related losses “and cannot continue to fulfil 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.
“As a result, the business case for an integrated group is no longer viable.”
The price of shares in Uniper, which also owns the coal-fired Ratcliffe-on-Soar power station in Nottinghamshire, has fallen by more than 90% in the past year.