LONDON (Reuters) – Varo Energy, backed by private equity giant Carlyle Group and the world’s biggest trading house Vitol, said on Monday it had agreed to buy Swedish refiner Preem, betting on growing demand for biofuels.
Varo already has stakes in oil refineries in Germany and Switzerland and is expanding in sustainable fuel and trading. It plans to invest around $3.5 billion between 2022 and 2026, with two-thirds committed to sustainable energies.
Varo said the combined company would supply around 10% of Europe’s road and marine fuels and be Europe’s second-largest renewable fuel producer. Preem has a pipeline to produce 1.3 million metric tons of renewable fuel per year.
It owns two refineries with a combined capacity of 352,000 barrels per day. The combined entity will have a hydrocarbon refining capacity of 530,000 bpd.
Varo did not say how much it paid in the all-cash deal. Reuters reported in December that talks were taking place between the two companies.
(Reporting by Shadia Nasralla; Editing by Kirsten Donovan)
