LetterOne completes purchase of RWE Dea for €5.1 billion
Russian investment firm LetterOne Group and Germany’s RWE AG have completed LetterOne’s acquisition of RWE Dea for an enterprise value of €5.1 billion, slightly higher than the agreed upon amount when the sale was reported in January.
Russian investment firm LetterOne Group and Germany’s RWE AG have completed LetterOne’s acquisition of RWE Dea for an enterprise value of €5.1 billion, slightly higher than the agreed upon amount when the sale was reported in January (OGJ Online, Jan. 16, 2015). The companies attribute the price adjustment to fluctuations in exchange rates.
Completion of the deal comes days after UK’s Department of Energy & Climate Change (DECC) said it wouldn’t approve the portion of the deal encompassing 12 producing North Sea oil and gas fields currently owned by RWE Dea because of the “effect that possible future sanctions imposed on LetterOne may have on the continued operation” of the fields.
DECC explained that Ed Davey, its secretary of state, determined inadequate a proposal drafted by the companies to alleviate such concerns, and subsequently notified them “that if the proposed acquisition were to proceed in its current form, he would be minded to require the companies to arrange for a further sale to a suitable third party.”
In response, LetterOne sent a note to the DECC expressing its intention to proceed with closing of the deal and possible legal action.
“In the event that any notice requiring the further sale of RWE Dea is issued, we intend to seek judicial review of DECC’s decision and fully reserve all of our rights both in that regard and generally,” it said on behalf of Jonathan Muir, LetterOne chief executive officer. “That reservation includes our right to seek compensation for any damage caused to the value of our investment in RWE Dea by DECC’s decision, including brining a claim under the Energy Charter Treaty.”
The firm also warned that “should DECC decide to require further change of control of RWE Dea, the situation that would ensue would likely be disruptive to production by RWE Dea.”