Eni is in exclusive discussions with KKR for the sale of a minority stake in its biofuels unit, Enilive.
The deal could value Enilive at between 11.5 and 12.5 billion euros, including debt.
This transaction is in line with Eni’s strategy of making its specific units financially independent, by focusing on distinct activities.
In recent years, KKR has multiplied its takeovers, such as the First Gen company or the 2.8 billion euro purchase of encavas.
Biofuels, derived from vegetable oils, fats and used cooking oils, are essential for decarbonizing the transport sector.
However, market perception of these fuels has recently deteriorated due to reduced profit margins and concerns over regulatory support.
Despite this, investor interest in Enilive remains strong, thanks to its integrated business model.
A diversified business model
Enilive operates several biorefineries in Italy and abroad, using raw materials from the Group’s African agriculture.
In addition to biofuels, Enilive produces biomethane and offers intelligent mobility services.
Its network of over 5,000 multi-fuel stations in Europe reinforces the company’s attractiveness to investors.
Eni has indicated that other institutional financial investors are showing strong interest, which could lead to a further sale of a 10% stake in Enilive.
Analysts estimate that Eni could raise more than 4 billion euros by selling up to 35% of Enilive, thereby supporting the group’s energy transition.
Financial outlook
For 2024, Enilive is forecasting core earnings of around €1 billion, mainly from its fuel stations.
This profitability and the diversification of its activities make Enilive particularly attractive to investors like KKR.
In March, Eni had already announced its intention to sell assets to raise €8 billion by 2027, in order to keep debt under control and finance its energy transition.
Eni is being assisted by JPMorgan and Mediobanca in the sale of this stake.
KKR is not the only potential buyer, but the exclusivity period ends in September, when a preliminary agreement could be signed.
The full transaction could be finalized by the end of the year.
The potential agreement with KKR marks a strategic step for Eni, highlighting the continued interest in renewable energies despite the challenges of the market.
This transaction would enable Eni to strengthen its financial position and support its ambitions in terms of energy transition.
