VARO Energy ("VARO") has finalized an agreement to acquire Preem Holding AB and Preem AB ("Preem") by purchasing 100% of Corral Petroleum Holdings AB ("CPH") in an all-cash transaction. Subject to regulatory approvals and customary closing conditions, the acquisition is set to be completed in the second half of 2025. This follows an extensive M&A process that began after CPH announced a strategic review of its assets in late 2023, with VARO securing exclusivity in August 2024. Deutsche Bank (Suisse) SA, acting as pledgee of CPH shares, executed the sale agreement on behalf of CPH’s parent company, Moroncha Holdings Co. Ltd.

Preem is a leading energy company in Scandinavia, supplying over 40% of Sweden’s transportation energy needs and serving customers across 17 European countries. As an early advocate of renewable fuel production, Preem has invested nearly $1 billion since 2010 in sustainability initiatives. These efforts have increased its renewable fuel production to 0.3 million tons per annum (mtpa), which is set to rise to 1.3 mtpa following the upgrade of the Synsat diesel plant. The company has an extensive pipeline of renewable fuel projects.

With two major refineries in Sweden—Lysekil and Gothenburg—Preem’s facilities account for 80% of Sweden’s refining capacity, with the ability to co-process renewable feedstocks. The company’s assets complement VARO’s operations across Northwest Europe, creating minimal overlap while strengthening VARO’s market presence.

Dev Sanyal, CEO of VARO, stated: "The acquisition of Preem is transformational. It positions VARO as Europe’s second-largest renewable fuel producer with a broad distribution network. Upon completion, we will serve over 50,000 business customers across 33 countries, with a strong portfolio of renewable fuel projects."

Marcel van Poecke, Chairman of VARO and Carlyle’s Energy Chairman, highlighted the acquisition's potential for value creation and enhanced energy security. Russell Hardy, Supervisory Board Member of VARO and CEO of Vitol, emphasized the importance of biofuels in Europe's decarbonization efforts and the strategic benefits of integrating with Vitol’s network.

The combined company will significantly expand its geographic footprint, fuel manufacturing capacity, and customer base. It will be the largest co-processor of renewable feedstocks in Europe and rank among the top five global producers of Hydrotreated Vegetable Oil (HVO) and Sustainable Aviation Fuel (SAF). With Sweden as its largest manufacturing base, VARO will control a vast supply network, accessing over 120 terminals.

Biofuel demand in the EU transport sector is expected to grow by 50-80% by 2030, and VARO aims to capitalize on this trend. Preem’s decade-long expertise in renewable fuel technology will strengthen the company’s ability to scale sustainable energy solutions. The acquisition enhances VARO’s investment capacity in renewable fuel projects, security of supply, and decarbonization efforts.

Since 2022, VARO has pursued an ambitious growth strategy targeting a tripling of EBITDA by 2026, with 50% coming from sustainable energies. Previous milestones include the expansion of a biogas facility in Coevorden and the development of a SAF plant in Rotterdam. The combined entity is poised to meet these financial goals while advancing decarbonization initiatives.

Both VARO and Preem are committed to reducing carbon intensity, having collectively lowered CO2 emissions from their operations by 16% and abated 5.5 million tons of CO2 annually for customers.

Since its founding in 2012, VARO has completed nearly 20 acquisitions, demonstrating a strong track record in integrating new businesses. With solid financial backing and a commitment to long-term investment, VARO will ensure responsible stewardship of Preem. The company remains a key partner in Sweden’s energy security and transition efforts, reinforcing its role as a leader in sustainable energy solutions across Europe.