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Business

Berlin scrutinizes planned sale of RWE subsidiary to Russian group

The German government is looking into a planned deal that would see the RWE subsidiary Dea sold to Russian investors. The deal has been controversial in view of tensions between Russia and the West over Ukraine.

A spokeswoman for the German Ministry for Economic Affairs and Energy said on Sunday that the ministry would examine whether the deal "damages Germany's strategic interests."

She however emphasized that there was "no concrete suspicion" that the deal did actually harm these interests. The examination would take two months, she added.

"We have been informed of the examination and will await its findings," a spokesperson for RWE said.

German utility company RWE announced at the end of March that it planned to sell its gas and oil subsidiary Dea to a group of Russian companies associated with oligarch Mikhail Fridman.

According to the Essen-based company, the deal would be worth 5.1 billion euros ($6.77 billion) and was expected to be completed by the end of the year.

Controversial announcement

The announcement of the deal, which came as relations between Russia and the West worsened over the crisis in Ukraine, provoked criticism from a number of German politicians.

The leader of the Green party, Simone Peter, called on the government to stop the sale, saying it sent out the wrong signal. Critical voices were also heard from among Chancellor Angela Merkel's conservatives.

Theoretically, the current examination could lead to the deal being stopped, though the government would have to demonstrate that it endangered the "strategic infrastructure" or "public safety" to be able to veto it.

If the deal were prevented, it would be a grave setback for RWE, which operated deeply in the red in 2013 for the first time in post-war history and continues to post major losses.

tj/hc (dpa, AFP, Reuters)

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