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Italian energy major Eni has agreed to sell a 25 per cent stake in its biofuel unit to KKR for €2.94bn as it seeks to fund its energy transition through a series of co-investments.
The US private equity firm’s investment will give Enilive, the Milan-based group’s biorefining division, a valuation close to €12bn, the company said in a statement on Thursday. Eni added that €500mn of KKR’s total investment would be used to inject capital into the business and bring debt down to zero.
The move is part of Eni’s broader strategy to bring in co-investors for divisions it has spun off, before seeking potential listings, as it looks to diversify from oil and gas to renewable energy.
Enilive, previously known as Eni Sustainable Mobility, offers charging stations for electric vehicles and biomethane and hydrogen refuelling options across Italy, Austria, France, Germany and Switzerland. The company also operates Eni’s biorefineries in Venice, Sicily and in the US as well as 22 biomethane production sites in Italy.
The KKR deal comes after Eni sold an 8 per cent stake in its renewable power and retail business, Plenitude, to Energy Infrastructure Partners last year for €588mn.
“This deal represents a new and important step forward in our energy transition strategy,” said Eni chief executive Claudio Descalzi. “Enilive and Plenitude are pivotal to our commitment to offering decarbonised energy solutions and progressively reduce emissions.”
As part of Descalzi’s strategy, Eni is also planning to sell a minority stake in a new carbon capture and storage (CCS) division. The technology is an innovative way to decarbonise highly pollutant industries, such as steel, cement and chemicals, where no other effective alternative is currently available.
After launching projects in Italy and the UK, Eni said last month it planned to develop “further initiatives in north Africa, the Netherlands, and the North Sea.” Decarbonisation plans were also announced for its domestic chemicals business Versalis.
Shares in Eni were up 1.2 per cent on Thursday morning. The company will report its third-quarter earnings on Friday.
Alberto Signori, a partner in KKR’s infrastructure team, said the deal “fits in perfectly with [the firm’s] vision to support transformative projects in the European energy sector”.
This article has been amended since publication to correct the timing of Eni’s third-quarter earnings
https://www.ft.com/content/caaaf9d6-fc92-4b1f-9171-7bfb29d4a4cf
