Italian energy titan, Eni, has struck a significant deal, agreeing to divest a robust 25 percent stake in its burgeoning biofuel division to the eminent private equity powerhouse, KKR, for a staggering sum of €2.94 billion. This strategic maneuver is a calculated effort by Eni to fuel its ambitious energy transition, paving the way for a multitude of co-investments.
KKR’s influx of capital propels the valuation of Enilive, the Milan-based company’s biorefining branch, to a remarkable proximity to €12 billion, as unveiled in a statement released Thursday. Moreover, a substantial €500 million chunk of KKR’s investment is earmarked for injecting fresh capital into the business, with an additional aim to obliterate its debt, bringing it down to a commendable zero.
This strategic infusion aligns seamlessly with Eni’s overarching ambition to engage co-investors in its spun-off divisions prior to any potential public listings, as the company seeks to metamorphose its focus from traditional oil and gas towards a more sustainable, renewable energy landscape.
Enilive, which was formerly branded as Eni Sustainable Mobility, champions an array of services, offering electric vehicle charging stations, along with biomethane and hydrogen refueling facilities scattered throughout Italy, Austria, France, Germany, and Switzerland. Additionally, it oversees Eni’s biorefineries located in Venice, Sicily, and the United States, not to mention its stewardship over 22 biomethane production sites within Italy’s borders.
This pact with KKR unfolds in the wake of Eni’s prior divestiture, wherein it sold an 8 percent stake in its renewable energy and retail arm, Plenitude, to Energy Infrastructure Partners, netting an impressive €588 million last year.
Battling for a cleaner future, Eni’s chief executive, Claudio Descalzi, remarked, “This deal marks a pivotal and promising advance in our energy transition strategy. Enilive and Plenitude are crucial to our steadfast commitment to providing decarbonized energy solutions while progressively slashing emissions.”
Descalzi’s vision doesn’t stop there; Eni is also eyeing the sale of a minority share in a nascent carbon capture and storage (CCS) division. This innovative technology holds the key to decarbonizing notoriously pollutive sectors like steel, cement, and chemicals, where conventional alternatives falter.
With ambitions stretched beyond Italian borders, Eni announced last month its intention to roll out additional projects in North Africa, the Netherlands, and the North Sea, following its earlier initiatives in Italy and the UK. Meanwhile, decarbonization measures are also underway for its domestic chemicals division, Versalis.
In the wake of this whirlwind of developments, Eni’s shares ticked upwards by 1.2 percent on Thursday morning, with the company poised to unveil its third-quarter earnings on Friday.
Alberto Signori, a partner in KKR’s infrastructure team, encapsulated the ethos of the deal, stating that it “fits perfectly with our vision to bolster transformative projects within the dynamic European energy sector.”
This article has been revised post-publication to rectify the timing of Eni’s forthcoming third-quarter earnings.