Varo Energy's Strategic Acquisition: A Deep Dive into Preem's Swedish Refineries

Varo Energy, a prominent player in the energy sector, is reportedly in talks to acquire Preem's Swedish refineries. This potential acquisition has sparked interest among investors, as it aligns with Varo's strategic growth plans and commitment to sustainable energies. Let's delve into the potential implications of this deal and its significance for Varo's future.

Varo Energy's "ONE VARO Transformation" strategy focuses on sustainable energies, aiming to build biogas and biofuels as strategic growth pillars. Acquiring Preem's refineries would bolster Varo's capabilities in these areas, enabling it to repurpose assets for biofuels and biogas production. This acquisition would help Varo meet its 2026 target of >250kt p.a. of net biofuels capacity and strengthen its biomethane and bio-LNG offerings to industrial and road transport sectors.



The acquisition of Preem's refineries could significantly impact Varo's biogas and biofuels production and distribution capabilities. Preem, Sweden's largest fuel company, operates two refineries with a considerable market share in biofuels. Integrating Preem's refineries into Varo's existing business could increase its biofuels manufacturing capacity, expand its biofuels trading capacity, and strengthen its market position in the biofuels sector.



To integrate Preem's refineries into its operations, Varo will likely focus on synergies and address potential challenges through its "Fit For Growth" program. This program aims to optimize assets, reduce emissions, and repurpose older assets for alternative uses. By reinvesting cash flows from its conventional energies business (Engine 1) into its sustainable energies business (Engine 2), Varo can accelerate its transition to net-zero emissions by 2040.

In conclusion, Varo Energy's potential acquisition of Preem's Swedish refineries is a strategic move that aligns with its sustainable energies growth strategy. This deal could significantly boost Varo's biogas and biofuels production and distribution capabilities, supporting its net-zero emission goal by 2040. As an investor, keeping an eye on this deal and Varo's progress towards its sustainability targets can be an intriguing opportunity.