Italy’s Eni is in exclusive negotiations with investment firm KKR regarding the sale of a minority stake in its biofuel unit, Enilive. This deal could value Enilive at approximately €11.5 to €12.5 billion ($12.5 to $13.6 billion), including debt. KKR is considering acquiring between 20% and 25% of Enilive, which aligns with Eni’s strategy to create financially independent units focused on specific sectors.
Biofuels, derived from vegetable oil, waste cooking oil, and grease, are anticipated to be crucial for decarbonizing the trucking, aviation, and shipping industries in the coming years. However, market sentiment has turned negative due to weakening profit margins and increasing concerns over regulatory support. Major competitors like Shell and BP have recently paused their biofuel projects.
Biraj Borkhataria, Head of Global Energy Transition Research at the Royal Bank of Canada, noted that the expected valuation exceeds market expectations, which are estimated between €7 billion and €10 billion.
Following the announcement, Eni’s shares rose by over 1% in early trading on the Milan stock exchange, reaching €14.11. The Italian energy group indicated that KKR is not the only interested buyer, and strong interest from institutional investors could facilitate the sale of an additional 10% stake in Enilive.
Analysts suggest that Eni could raise more than €4 billion by selling up to 35% of Enilive at the higher end of the valuation range. In March, Eni announced plans to sell assets to generate net proceeds of €8 billion by 2027 to manage debt and support its energy transition efforts.
Enilive focuses on biorefining, biomethane production, and smart mobility solutions, operating a network of over 5,000 multi-fuel stations across Europe. It is projected to achieve core earnings of around €1 billion this year. JPMorgan and Mediobanca are acting as financial advisors for Eni in this stake sale.