RWE says Dea sale to be wrapped up by March

16th January 2015, Comments 0 comments

German power giant RWE said Friday it expects to wrap up the planned sale of its oil and gas unit Dea to a Russian-controlled investment fund by early March.

"RWE and LetterOne Group have agreed to complete the sale of RWE Dea in its entirety by early March 2015, at the latest," the German group said in a statement.

The 5.0-billion-euro ($5.8-billion) deal, originally announced last year, had been held up because the British authorities had not yet given their nod of approval.

But a compromise solution has now been reached whereby LetterOne Group would keep Dea UK separate from the remaining RWE Dea activities "for a number of years," RWE said.

"In the unlikely event that sanctions on LetterOne or its owners were imposed, RWE will retain the obligation to re-purchase the UK business during the first year post completion of the sale of RWE Dea," it explained.

LetterOne is based in Luxembourg, but controlled by Russia's Alfa Group which belongs to billionaire entrepreneur Mikhail Fridman.

The sale is a key part of RWE's strategy for reducing debt and freeing up investment for the transition away from fossil fuels towards renewable energy currently under way in Europe.

However, it was controversial given the crisis in east Ukraine and Europe's threat of tougher sanctions against Russia. And it drew strong criticism, notably from the opposition Green party, and drove debate about Germany's dependence on Russian fossil fuels.

Nevertheless, the German government approved the deal last August, saying it would not affect the security of supply in Germany.

© 2015 AFP

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