Varo Energy, a European energy company based in Switzerland, on March 31 announced an agreement to acquire Preem, a Sweden-based petroleum and biofuels company that is developing additional renewable diesel and sustainable aviation fuel (SAF) capacity.

Under the agreement, Varo will acquire Preem Holding AB and Preem AB via the purchase of 100% of the share capital of the parent company, Corral Petroleum Holdings AB, in an all-cash transaction. The acquisition is subject to customary closing conditions and regulatory approvals and is currently expected to close during the second half of 2025.

The transaction includes Preem’s refineries in Lysekil and Gothenburg, Sweden, as well as the company’s storage infrastructure and fuel station network. Preem in late 2023 announced plans to move forward with a conversion project at the Lysekil refinery to produce renewable diesel and SAF. The company also produces renewable diesel at the Gothenburg refinery.

According to Varo, Preem was an early mover in renewable fuel production, investing nearly $1 billion since 2010 in initiatives to produce renewable fuels and reduce carbon intensity throughout the value chain. The company currently has the capacity to produce 300,000 metric tons per year of renewable fuels. Varo estimates renewables capacity will increase to 1.3 million metric tons per year once upgrades are complete at the Lysekil refinery. 

Varo is also working to develop SAF capacity at its refinery in Rotterdam. That project, announced in 2023, is expected to enable 245,000 metric tons per year of SAF production. 

A full copy of the acquisition announcement is available on Varo’s website.