[August 22, 2014]FRANKFURT/BERLIN (Reuters)
- Germany's economy ministry will approve the sale of
utility RWE's <RWEG.DE> oil and gas unit DEA to a
Russian investor despite tensions between Russia and the
West over the Ukraine crisis, two people familiar with
the matter said.
The economy ministry said in June it was investigating whether to
block the 5.1 billion euro ($6.9 billion) sale of the DEA unit to
the Letter One group of investors led by Russian tycoon Mikhail
Fridman, which was announced in March.
Representatives of the ministry, RWE and the Letter One consortium
declined to comment.
Europe and the United States have imposed economic sanctions against
Russia for its annexation of Ukraine's Crimea region and its backing
of pro-Russian separatists, who are fighting against government
forces in eastern Ukraine. Russia, in turn, has slapped bans on
Western food imports.
As part of the deal, Fridman, Russia's second-richest man, and his
co-investors get stakes in about 190 oil and gas licenses or
concessions in Europe, the Middle East and North Africa.
The German government could theoretically have used a clause in its
foreign trade law that allows it to block takeover deals that
threaten "public safety and order", but it would have been an
RWE has previously said it expects the deal, which has already got
antitrust approval from the European Union, to be finalised this
The transaction came under criticism from senior German politicians
in March as relations between Russia and the West deteriorated over
Germany currently receives more than a third of its gas and oil from
RWE, like other German utilities, is struggling to adjust to a power
sector shake-up as Germany moves away from nuclear energy and
encourages a shift to more renewables, while Europe's energy demand
The shake-up has more than halved the debt-burdened firm's market
value in four years.
RWE has been looking for ways to reduce its debt of more than 30
billion euros, including cutting jobs and shedding assets.
($1 = 0.7345 Euros)
(Reporting by Alexander Hübner, Tom Käckenhoff und Gernot Heller;
Writing by Ludwig Burger)