RWE AG
Sale of Dea: LetterOne and RWE complete transaction

• Enterprise value of €5.1 billion
• Positive transaction for all parties involved

March 02, 2015  + + +  The LetterOne Group and RWE AG today completed RWE’s sale of RWE Dea AG to LetterOne. In January, both parties had announced their plans to complete the transaction at the beginning of this month. The agreed enterprise value is approximately €5.1 billion based on current exchange rates. Due to exchange rate fluctuations, this is slightly higher than the amount agreed on when the sale was announced in January.

Peter Terium, CEO of RWE AG: 'The sale of RWE Dea demonstrates that even in difficult conditions, we continue to realize our plans. Both parties negotiated good value for money, and RWE can now focus fully on its core business.' He continued by saying that the transaction was not only an important milestone for the RWE Group but that it was beneficial for all involved – including Dea and its workforce. 'Dea gets a new owner who wants to invest long term in the oil and gas production business and will guide the company into a positive future.'

Mikhail Fridman, Chairman of LetterOne: 'We are delighted to have completed the acquisition of Dea. We now look forward to working with Dea’s management and staff. Our ambition is to develop and grow Dea. We are convinced that the current macroeconomic environment and the low oil price, give us an opportunity to achieve our ambition.'

Source: RWE AG

+ + +

Oil & Gas Journal
LetterOne completes purchase of RWE Dea for €5.1 billion

March 02, 2015 + + + 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.”

Source: Oil & Gas Journal

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