Milan — Italian energy group Eni (ENI.MI), opens new tab said on Tuesday it is in exclusive talks with investment firm KKR (KKR.N), opens new tab over the potential sale of a minority stake in Enilive, in a deal that could value the biofuel unit at up to 12.5 billion euros ($13.6 billion).
The deal – under which KKR could buy between 20% and 25% of Enilive – is part of Eni’s strategy to develop separate units focused on specific businesses and make them become financially independent.
“The valuation in the range of 11.5-12.5 billion euros is well above market expectations, which we think were in the range of 7-10 billion euros,” said Biraj Borkhataria, head of Global Energy Transition Research at Royal Bank of Canada.
In another step of the broader plan, Eni agreed in December to sell to Swiss fund Energy Infrastructure Partners (EIP) a minority stake in its retail and renewable unit Plenitude in a transaction that valued the company at around 10 billion euros.
The long-term goal of Eni is to attract investors to share investments in its energy transition businesses and also boost the valuation of the entire group.
“The strong interest shown in this period by leading institutional financial investors could lead to the subsequent sale of a further stake of up to 10% of Enilive,” Eni said in a statement.
Mediobanca is acting as financial advisor for Eni on the Enilive stake sale.
The unit is focused on biorefining, biomethane production, smart mobility solutions and has a network of more than 5,000 multi-fuel stations in Europe.
Enilive plans to increase its biorefining capacity to more than 3 million tons by 2026, doubling the capacity it had at the end of 2023.
($1 = 0.9186 euros)
*Francesca Landini, editing: Giulia Segreti & Susan Fenton – Reuters
