Unique-Varo Vitality in talks to purchase Preem’s Swedish refineries, sources say

By Robert Harvey, Marek Strzelecki and Anna Hirtenstein

LONDON (Reuters) – European power agency Varo Vitality is in talks to accumulate Preem’s two Swedish refineries in a wager on rising demand for low-carbon biofuels, 4 business sources advised Reuters.

Varo has been increasing quick in Europe’s refining and gas buying and selling in recent times. The corporate is backed by non-public fairness big Carlyle Group (NASDAQ:CG) and the world’s largest buying and selling home Vitol, which has loved file earnings in recent times.

Varo may purchase the Gothenburg and Lysekil vegetation from Corral Petroleum Holdings, which owns Preem, the sources mentioned.

A Varo spokesperson declined to remark. Preem declined to remark.

The sources mentioned the worth of the potential deal wasn’t clear because the downturn in Europe’s refining margins has made transactions extra difficult, one of many sources mentioned.

Preem’s adjusted earnings fell 15% to $1 billion within the first 9 months of 2024, however plunged 94% to $28 million within the third quarter alone.

Varo already has stakes in refineries in Germany and Switzerland and is increasing in sustainable gas and buying and selling. It plans to take a position round $3.5 billion between 2022 and 2026, with two-thirds dedicated to sustainable energies.

Preem goals to extend manufacturing of renewable fuels to five million cubic metres by 2035, the corporate has mentioned. It additionally has a community of over 500 petrol stations in Sweden.

($1 = 10.8499 Swedish crowns)