Germany approves RWE Dea sale

Germany’s Economy Ministry has given a green light to the sale of RWE Dea to LetterOne group, headed by Russian billionaire Mikhail Fridman.

RWE Dea AG is an international oil & gas exploration and production company with headquarters in Hamburg, Germany. The German upstream player owns concessions, facilities and offices in 14 countries of the world.

These include production facilities and concessions in Germany, the UK, Norway, Denmark and Egypt. The company has exploration permits in Ireland, Mauritania, Poland, Suriname, Trinidad & Tobago and Turkmenistan. It also operates large underground gas-storage facilities in Germany.

The buyer, LetterOne, run by the ex-TNK-BP CEO Fridman, is a privately owned Luxembourg-based global investment vehicle focused on utilizing its financial resources, management and investment expertise to make value-driven investments in the Energy and Telecoms sectors through its two main business units L1 Energy and LetterOne Telecom.

The approval of the transaction, valued $6.8 billion, has been given despite the tense relations between Germany and Russia over the Ukraine crisis.

According to reports, the fact that LetterOne is not a Russian state company, but an EU-based firm was a decisive condition for the approval given by Germany.

To remind, the EU recently imposed sanctions on Russia, banning export of products destined for deep water oil exploration and production, arctic oil exploration or production and shale oil projects in Russia.

Russia has retaliated imposing a ban on imports of fruit, vegetables, meat, fish and dairy products from the EU countries, the US, Canada, Australia and Norway. The ban will be in place for a year.

TNK-BP cash
As at 31 December 2013 LetterOne’s assets under management total $29bn and originate from the investment and operational track record of its founding shareholders including the sale of TNK-BP, a major Russian integrated oil and gas company.

LetterOne is owned by Russian billionaire Mikhail Fridman and his partners German Khan and Alexei Kuzmichev, who co-own Alfa Group, the biggest financial and industrial investment group in Russia. The trio last year, through the AAR consortium, sold its stake in TNK-BP to Rosneft for a cash consideration of $27.73 billion.

[mappress]