Germany’s Uniper SE and Finland’s Fortum Ojy disclosed Russia has seized their subsidiaries in the country and placed them under federal control.

President Vladimir Putin signed an executive decree Tuesday allowing Russia’s state property management agency to control Uniper’s Unipro and Fortum’s PAO Fortum. Both companies operate power plants in Russia and are majority owned by their respective governments.

Kremlin spokesperson Dmitry Peskov said the decree was necessary to “reduce risks” and create a way to extract “compensation” for western sanctions and seizures.

“The decree is a response to the aggressive actions of unfriendly countries, which are aimed at creating a regulatory framework for the actual seizure of assets of Russian companies abroad,”...