KKR to pay EUR 3bn for minority stake in Eni’s biofuels arm

US private equity firm KKR & Co Inc (NYSE:KKR) has sealed a definitive agreement to acquire a 25% stake in Enilive, the biofuels subsidiary of Italian oil and gas major Eni SpA (BIT:ENI), for EUR 2.938 billion (USD 3.163bn).

The terms of the deal, which has been under discussion since July, give the targeted business a post-money equity valuation of EUR 11.75 billion.

Enilive is focused on biorefining, biomethane production and smart mobility solutions, including Enjoy car sharing. It also operates a network of more than 5,000 Enilive filling stations in Europe offering, among others, HVOlution biogenic fuel, bio-LPG and biomethane. The business plans to increase its biorefining capacity to over five million tonnes per year by 2030.

Eni noted in a statement that the agreement with KKR strengthens the company’s capital structure, reduces its net financial position and at the same time allows it to retain consolidation and control of Enilive.

The transaction will be funded through subscription of a capital increase in Enilive reserved to KKR amounting to EUR 500 million and the purchase of EUR 2.438 billion worth of Enilive shares from Eni. Additionally, Eni will undertake a capital increase of EUR 500 million prior to the completion of the transaction to set a debt-free company, a press statement says.

“Enilive, alongside Plenitude, is central to our commitment to providing decarbonised energy solutions and progressively reducing emissions from the end use of our products. Both companies have attracted significant interest from leading international partners and achieved high market valuations, which indicates that our approach to the energy transition is appreciated,” said Eni’s CEO Claudio Descalzi.

KKR’s agreed investment hinges on customary regulatory approvals.

The US private equity firm has been active in Italy since 2005. It will make the Enilive investment through its Global Infrastructure Strategy, which was launched in 2008 and currently manages over USD 73 billion in infrastructure assets.

(EUR 1 = USD 1.077)

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