LetterOne, a consortium of Russian investors based in Luxembourg, has received the nod to acquire oil and gas exploration company RWE DEA from German energy group RWE, subject to regulatory approval. The investors led by Russian billionaire Michail Fridman are said to be prepared to pay €5.1 billion for the Hamburg-based firm, including debt of €600 million.

With its offer, LetterOne edged out BASF subsidiary Wintershall, Hungarian oil and gas group Mol and a consortium of private equity group KKR with Kuwait-based Kufpec.

For the Russian-led group founded in 2013 this would be the first strategic engagement in the oil and gas sector. Fridman and another Russian billionaire, German Khan, established their L1 Energy fund in 2013 with capital sufficient to pump $20 billion (€14.4 billion) into oil and gas projects over the next three to five years.

RWE DEA has 1,400 employees worldwide, including 1,000 in Germany.

Peter Terium, CEO of RWE, called the sale "an important milestone" in the strategic repositioning of the energy group, as well as a major step toward strengthening its finances.

RWE DEA, which reported an operating profit of €512 million in 2013, has shares in around 190 oil and gas licenses in Europe, the Middle East and North Africa.