Russian billionaire Mikhail Fridman. Image courtesy of tvrainru/Youtube.

Germany-based utility firm RWE closed the sale of its oil and gas production unit, RWE Dea, Monday to a group led by Russian billionaire Mikhail Fridman despite opposition from UK regulators.

The $5.6 billion deal, announced last year, required approval from 14 countries where RWE Dea operates in Europe, the Middle East and Africa.

LetterOne, a Luxembourg-based investment group headed by Fridman, agreed to buy the company around the same time the EU and United States imposed sanctions on Russia for its annexation of Crimea in March.

Over the weekend Britain’s Department of Energy and Climate Change (DECC) tried to block parts of the sale citing the country’s sanctions against Russia and refused to write a letter of comfort approving the deal, Reuters said.

The DECC said the current sales agreement may require the companies to sell up to $1.12 billion of UK assets.

In November, LetterOne and RWE asked the UK government to agree not to seize and sell off the UK North Sea assets included in the deal if the country adopts stricter sanctions against Russia.

LetterOne said it would seek out a “judicial review” if the DECC forced it to sell off UK assets and it will exercise its “right to seek compensation for any damage caused to the value of our investment in RWE DEA.”

“Both parties negotiated good value for money, and RWE can now focus fully on its core business,” RWE Chief Executive Peter Terium said.

The sale will take RWE Dea’s $37 billion in debt off RWE’s books.

RWE Dea owns interests in about 190 oil and gas licenses or concessions in Europe, the Middle East and North Africa.


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