Varo purchases Swedish refiner Preem as part of a bet on biofuels

Varo Energy, which is backed by Carlyle Group, the largest private equity firm in the world, and Vitol, one of the biggest trading houses in history, announced on Monday that it had bought Swedish refiner Preem. The company said this was a bet on a growing demand for biofuels.

Varo has already acquired stakes in oil refining companies in Germany and Switzerland, and is now expanding its sustainable fuels and trading. It has plans to invest $3.5 billion in sustainable energy between 2022-2026.

Varo stated that the combined company will supply around 10% to Europe's road fuels, marine fuels, and be Europe’s second largest renewable fuel producer. Preem's pipeline can produce 1.3 millions metric tons renewable fuel each year.

The company owns two refineries that have a combined daily capacity of 352,000 barrels. The combined entity has a hydrocarbon refinery capacity of 530,000 barrels per day.

Varo has not disclosed the amount it paid for the cash-only transaction. In December, it was reported that there were talks between the two companies. Reporting by Shadia Naralla, Editing by Kirby Donovan

(source: Reuters)