Russian Investor to Acquire $6.9 Billion RWE’s Firm After Germany’s Nod

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Russian Investor to Acquire $6.9 Billion RWE’s Firm After Germany’s Nod

Germany’s economy ministry has given the greenlight for the sale of DEA to a Russian business mogul despite tensions between Russia and the West over hostilities in Ukraine.

The approval announced on Friday clears the biggest obstacle out of the way for the 5.1 billion euro ($6.9 billion) transaction, as RWE’s struggles to cut a debt burden of more than 30 billion euros.

Included in the deal is holdings in around 190 oil and gas licenses or concessions across Europe, the Middle East and North America by Russian tycoon Mikhail Fridman and his partners, Reuters reported.

Relationships between Russia and the US and Europe were already worsening over Ukraine when the deal was announced in March.

The West has slapped economic sanctions against Russia for its annexation of Crimea off Ukraine and its support for pro-Russian insurgents, who are at war with government forces in eastern Ukraine. Russia has responded by restricting Western food imports.

Germany’s deputy Economy minister Stefan Kapferer told reporters on Friday that the government did not see the deal endangering the country’s energy supply.

The European Union’s antitrust regulator has already approved the deal, but oversight authorities in a few other nations are yet to give their nods.

“The decisive factor for our decision was that LetterOne is an EU-based investor and that we see no indication for any kind of improper bypassing. In addition, we don’t expect that this planned acquisition will have any negative impact on Germany’s security of [oil and gas] supply,” ministry spokeswoman Tanja Alemany Sanchez de León is quoted by the Wall Street Journal as saying.

LetterOne, which is owned by Fridman, said in March that the purchase is the first strategic move to penetrate the oil and gas industry. RWE seeks to use a huge chunk of the sale proceeds to service its debt.

To contact the reporter of the story: Yashu Gola at yashu@forexminute.com