VARO Energy has announced an agreement to acquire Preem Holding AB and Preem AB through the purchase of 100 percent of the share capital of Corral Petroleum Holdings AB, the parent company. The transaction, structured as an all-cash deal, is expected to be completed in the second half of 2025, subject to regulatory approvals and customary closing conditions.
The agreement follows a competitive mergers and acquisitions process initiated after Corral Petroleum Holdings announced a strategic review of its assets in late 2023. VARO has been engaged in this process for over 15 months, having entered into exclusivity in August 2024. As part of the process, Deutsche Bank (Suisse) SA, acting as the pledgee of Corral Petroleum Holdings’ shares, executed the sale agreement on behalf of the parent company, Moroncha Holdings Co. Ltd.
Preem is one of Scandinavia’s largest energy companies, playing a crucial role in the region’s energy security by supplying over 40 percent of Sweden’s transportation fuel and approximately a quarter of Scandinavia’s energy needs. The company serves customers across 17 European countries and has been an early adopter of renewable fuel production. Since 2010, Preem has invested nearly US$1 billion in renewable fuels and initiatives aimed at reducing carbon intensity throughout its value chain. These investments will enable the company’s renewable fuel production to increase from 0.3 million tonnes per annum (mtpa) to 1.3 mtpa with the upgrade of the Synsat diesel plant, which will allow up to 40 percent co-processing of renewable feedstocks. Additionally, Preem has a strong pipeline of further renewable fuel projects.
Preem operates two major fuel manufacturing facilities in Sweden, located in Lysekil and Gothenburg. With a combined capacity of 352,000 barrels per day, these facilities account for 80 percent of Sweden’s refining capacity and have the capability to co-process renewable feedstock. The company’s assets are highly complementary to VARO’s existing operations across northwest Europe, with minimal overlap.
VARO’s CEO, Dev Sanyal, described the acquisition as transformational for the company. He noted that, upon completion, VARO would become Europe’s second-largest renewable fuel producer, with a broad distribution and storage network spanning key European markets and a conventional fuel production capacity of 530,000 barrels per day. The combined entity will serve over 50,000 business customers in 33 countries, supported by a portfolio of mature renewable fuel projects.
Marcel van Poecke, chairman of VARO and chairman of energy at Carlyle, highlighted the value creation opportunities presented by the acquisition. He emphasised that the deal would enable disciplined investment in future growth projects while ensuring the delivery of secure and reliable energy to Europe.
Russell Hardy, a member of VARO’s Supervisory Board and CEO of Vitol, welcomed the transaction, stating that the combined entity would become Europe’s second-largest biofuel producer, a key element in decarbonising transportation. He noted that the business would benefit from access to Vitol’s network and expertise, further strengthening its ability to meet evolving market demands.
Strengthening a Leading Energy Provider
The acquisition will significantly expand VARO’s geographic footprint across major European markets, enhancing its ability to source global feedstocks and serve an enlarged customer base. By integrating Preem’s manufacturing facilities with VARO’s assets in Cressier and Bayernoil, total fuel manufacturing capacity will reach 530,000 barrels per day. The combined company will supply over 50,000 business customers and account for nearly 10 percent of all road and marine fuels sold in Europe, with Sweden becoming its largest manufacturing hub.
The new entity will also emerge as Europe’s largest co-processor of renewable feedstocks and one of the world’s top five producers of Hydrotreated Vegetable Oil and Sustainable Aviation Fuel. It will be the leading renewable fuel producer in Sweden and the second-largest in Europe.
The strategic focus will be on three key investment priorities. Firstly, enhancing supply security and asset resilience across manufacturing, distribution, and storage. Secondly, decarbonising and increasing the efficiency of conventional manufacturing assets. Thirdly, investing in the combined company’s portfolio of biofuel projects, ensuring alignment with evolving customer demand for sustainable energy.
Advancing VARO’s 2022 Strategy
In 2022, VARO set ambitious targets to triple EBITDA by 2026, with 50 percent of earnings derived from sustainable energies. The company has already made substantial progress towards these objectives, including the acquisition and expansion of a biogas facility in Coevorden and the development of a Sustainable Aviation Fuel facility in Rotterdam. The integration of Preem is expected to further strengthen VARO’s position in achieving these financial and sustainability goals.
Both VARO and Preem have demonstrated a commitment to decarbonisation, with a shared objective of reducing carbon intensity across their operations. Since implementing carbon tracking measures, the two companies have collectively reduced their own CO2 emissions by 16 percent and have abated 5.5 million tonnes of CO2 per year for their customers.
A Long-Term Investment Approach
Since its founding in 2012, VARO has completed nearly 20 acquisitions, establishing a strong track record of investing in and integrating acquired businesses. Backed by long-term strategic and financial investors, the company remains committed to supporting energy security and decarbonisation efforts in its key markets.
With strong cash flow generation and a long-term asset management strategy, VARO aims to ensure responsible stewardship of Preem’s operations. The company will continue to play a key role in Sweden and the wider region’s energy security and transition towards sustainable energy solutions.
For more information visit www.varoenergy.com
