Eni talks with KKR for Enilive stake values biofuels unit at over $13 billion

Eni has signed a temporary exclusivity agreement with global investment company KKR to sell a stake in its biofuel and mobility unit Enilive, valuing it at up to Eur12.5 billion ($13.6 billion), the Italian energy company said July 23.

Under the agreement, Eni said both parties are committed to negotiating the terms of the sale of a 20% to 25% stake in Enilive, which would potentially raise more than Eur3.1 billion for Eni.

"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.

Enilive is Eni's downstream division dedicated to biorefining, biomethane production, smart mobility solutions including Enjoy car sharing, and the distribution of all energy carriers for mobility. The company owns more than 5,000 Enilive fueling stations in Europe, which sell fuels including HVOlution biogenic fuel (100% Hydrogenated Vegetable Oil), bio-LPG and biomethane.

Its assets include Eni's Venice and Gela biorefineries in Italy, the US St. Bernard Renewables venture with PBF Energy and 22 biomethane production plants in Italy.

If completed, the deal would value Enilive "well above market expectations," according to RBC's equity research desk in a note that estimated it at Eur7 billion-10 billion.

"The price tag is likely to surprise investors positively, particularly as public market sentiment towards biofuels has been particularly negative recently amid weaker margins and risk on policy support," RBC's Biraj Borkhataria said in a note.

The Eniilive deal would also help de-risk Eni's target for divesting Eur8 billion worth of assets during its 2024-2027 strategic plan, RBC said.

Eni is targeting Enilive's biorefining capacity to be over 3 million mt/year by 2026 and over 5 million mt/year by 2030.

In January, Eni sanctioned its third bio-conversion plant at the Livorno site in Italy and a fourth domestic one is under study. It is planning two further international final investment decisions in South Korea and Malaysia in 2024, giving it more than 1 million mt/year of SAF optionality by 2026 -- twice its previous goal -- with the potential to double by 2030.