Switzerland-based oil refiner and supplier Varo Energy has completed its acquisition of Sweden's Preem AB, forming a new group under the name VaroPreem, the company announced on 16 January.

Following regulatory approvals, the transaction brings together two established European fuel producers, creating what VaroPreem describes as Europe’s third-largest independent refiner and second-largest renewable fuels producer.

The combined group operates six manufacturing hubs in Lysekil and Gothenburg, Sweden; Neustadt and Vohburg, Germany; Cressier, Switzerland; and Coevorden, the Netherlands. Together, these facilities provide 530 kbd of conventional fuel processing capacity, 1.3 million tonnes per year of renewable fuel capacity, and 450 GWh of biogas production.

VaroPreem said the group has access to more than 120 terminals and supplies customers in 33 countries. It estimates that the business meets around 10% of European mobility demand across road and marine sectors.

The acquisition will combine the inland bunkering capabilities of Reinplus Fiwado (formerly Reinplus Vanwoerden Bunker) with the marine bunkering coverage of Preem.

Reinplus became a subsidiary of Varo Energy following the merger between Argos and Varo Energy in 2015 and performs deliveries across a number of inland locations primarily along the Rhine, with a coverage that includes Amsterdam, Antwerp and Delfzijl.

Preem, meanwhile, has been supplying marine fuel along Sweden's west coast (in Gothenburg, Halmstad, Lysekil, Uddevalla and Malmö) and east coast (in Stockholm, Gävle, Norrköping and Sundsvall), in the southwest port of Malmö and in the southeast ports of Kalmar and Karlshamn.

With a total refining capacity of around 352,000 barrels per day at its plants in Gothenburg and Lysekil, Preem has been Sweden's largest refiner and also one of the largest energy providers in Scandinavia, supplying over 40% of Sweden's and around a quarter of the region's energy requirements for transportation.

The company said completion of the deal delivers Varo Energy’s ONE Varo Transformation strategy, launched in 2022, ahead of schedule. On a pro forma basis, Varopreem expects 2025 EBITDA to be approximately three times higher than 2021 levels, with approximately 50% of earnings generated from sustainable energy activities.

Recent investments include the reconstruction of the Synsat facility at Lysekil, enabling co-processing of renewable feedstocks, and the production of biomethane and bio-LNG at the Coevorden site.

Dev Sanyal, Group Chief Executive Officer, Varopreem, commented: "The creation of Varopreem marks a defining moment for Varo and Preem. Together, we have created one of Europe's most significant energy companies, built on the dedication of colleagues whose work has made this possible."

The newly established Executive Board comprises nine members, including Sanyal as Group CEO, Magnus Heimburg as Deputy CEO and EVP Markets & Customers, and Georges Menane as EVP and Group Chief Financial Officer. Other board members include Hugues Bourgogne (EVP Manufacturing, Projects & Technology), Stewart Peter (EVP Trading & Optimisation), Theo Pannekeet (EVP Sustainable Energies Value Chain), Eric Westerholm (EVP Strategy & Transformation), Susanne Stenman (EVP Data & Information Technology), and Gilles Vollin (EVP Integration, People & Communication).

The acquisition was financed through a debt package that added 15 new lenders, expanding the lending syndicate to 30 financial institutions from Europe, the USA, Japan, Southeast Asia, the Middle East and South Africa.

VaroPreem said it will continue operating a “twin-engine” strategy, supplying both conventional fuels and sustainable energy products, while focusing on security of supply and funding further transition investments.