ByCharles Kennedy– Mar 31, 2025, 11:30 AM CDT
Varo Energy, owned by the world’s biggest independent oil trader, Vitol, and the Carlyle Group, has reached a deal to buy Swedish refiner Preem, an early mover in renewable fuel production.
Following more than a year of exclusive negotiations, Varo Energy – in which
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Carlyle, which owns 66.66%, and Vitol, which owns 33.33%, announced on Monday that they had reached agreements to buy Preem’s parent in an all-cash transaction, the value of which was not disclosed.
The deal is subject to customary closing conditions and the receipt of regulatory approvals and is expected to be completed in the second half of 2025.
Preem owns two major fuel manufacturing facilities in Sweden, at Lysekil and Gothenburg. The two facilities have a combined capacity of 352,000 barrels per day (bpd), which is 80% of Sweden’s refining capacity, and the ability to co-process renewable feedstock.
“Primarily located in Scandinavia, Preem’s assets are highly complementary to VARO’s existing operations across northwest Europe with limited overlap,” the company backed by Carlyle and Vitol said.
Vitol’s CEO Russell Hardy, who is also Supervisory Board member of VARO, said:
“The company will be Europe’s second largest producer of biofuels – which are key to decarbonising transport in Europe. It will benefit from access to Vitol’s network and global expertise.”
The company will also be the largest co-processor of renewable feedstocks in Europe. On completion, the combined group will rank in the top five largest producers of Hydrotreated Vegetable Oil (HVO) and Sustainable Aviation Fuel (SAF) globally. It will be Europe’s second largest renewable fuel producer and the top producer in Sweden, Varo said.
Following the completion of the transaction, Varo will use the decarbonization expertise and proven track record of both organizations “to support national and European energy transition agendas and drive progress toward a low-carbon future.”
Preem also operates seven renewable storage facilities in Sweden, Germany, the Netherlands, and Spain, with a combined capacity of 2.1 million barrels.
By Charles Kennedy for Oilprice.com
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