Varo Energy, backed by private equity giant Carlyle Group (CG.O), and global trading leader Vitol Group announced on Monday that they have agreed to acquire Swedish refinery operator Preem, capitalizing on the growing demand for biofuels. Varo already holds stakes in refineries in Germany and Switzerland and is expanding its sustainable fuels and trading business. The company plans to invest approximately $3.5 billion between 2022 and 2026, with two-thirds allocated to sustainable energy.
The merger will position the combined company to supply about 10% of Europe’s road and marine fuels, making it the second-largest renewable fuel producer in Europe. Preem has an annual production capacity of 1.3 million tons of renewable fuels and operates two refineries with a total capacity of 352,000 barrels per day. Following the merger, the combined company will have a total refining capacity of 530,000 barrels per day.
