Varo Energy in talks to buy Preem's Swedish refineries
European energy firm Varo Energy is in talks to acquire Preem's two Swedish refineries in a bet on growing demand for low-carbon biofuels. Varo has been expanding fast in Europe's refining and fuel trading in recent years. The company is backed by private equity giant Carlyle Group CG.O and the world's biggest trading house Vitol, which has enjoyed record profits in recent years.
Varo could buy the Gothenburg and Lysekil plants from Corral Petroleum Holdings, which owns Preem, the sources said.
The sources said the value of the possible deal wasn't clear as the downturn in Europe's refining margins has made transactions more complicated, one of the sources said.
Preem's adjusted earnings fell 15% to $1 B in the first nine months of 2024, but plunged 94% to $28 MM in the third quarter alone.
Varo already has stakes in refineries in Germany and Switzerland and is expanding in sustainable fuel and trading. It plans to invest around $3.5 B between 2022 and 2026, with two-thirds committed to sustainable energies.
Preem aims to increase production of renewable fuels to 5 million cubic meters by 2035, the company has said. It also has a network of over 500 petrol stations in Sweden.
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