German utility RWE (RWEG.DE) on Monday closed the sale of its oil and gas production unit DEA [RWEDE.UL] to Russian billionaire Mikhail Fridman, ending months of uncertainty over whether the 5.1 billion euro ($5.7 billion) deal would go ahead.
The transaction, first announced a year ago, had caused controversy as it coincided with sanctions imposed on Russia for its actions in Ukraine, sparking concern in some EU countries about whether a European oil and gas business should fall into Russian hands.
As a result, RWE was forced to abandon its original plan to close the deal in 2014 and move the date further out into 2015, burdening its shares and fuelling concerns that the transaction may fall apart.
On Saturday, Britain's Department of Energy and Climate Change (DECC) attempted to block parts of the sale, citing possible sanctions against Russia, but RWE said it would press ahead anyway.
Britain said that if the deal goes ahead as planned it may require the companies to arrange for a further sale of the British assets held by DEA, worth about 1 billion euros, to a third party.
Fridman's LetterOne said it would "seek judicial review" in such a case, including "our right to seek compensation for any damage caused to the value of our investment in RWE DEA".
RWE has committed itself to buy back the British assets and seek a third buyer only if the EU or the United States impose sanctions on LetterOne's owners before March 2, 2016.
The sale provides RWE with a much-needed cash injection, as the group suffers from weak wholesale power prices, a boom in competing renewable energy capacity as well as a 31 billion euro debt pile it has accumulated over the past decade.
"Both parties negotiated good value for money, and RWE can now focus fully on its core business," RWE Chief Executive Peter Terium said in a statement.
RWE said the sales price had gone up to 5.1 billion from 5 billion agreed in mid-January, citing currency developments since then.
RWE shares were down 0.7 percent at 7.33 a.m. ET, compared with a 0.1-percent drop in the blue chip DAX index .GDAXI.
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