Eni SpA E, Italy’s leading oil and gas company, has attracted interest from multiple suitors regarding a potential second stake sale in its biofuel unit, Enilive, per a Reuters report. As Eni finalizes the details of a deal to sell a stake in Enilive to U.S. investment firm KKR & Co. Inc. KKR, other investors, including New York-based Stonepeak, have reportedly shown interest in acquiring a minority stake in the biofuel venture.
Eni to Close Stake Sale Deal With KKR
Eni is in advanced talks with KKR regarding the potential sale of a 20-25% stake in Enilive, valued between €11.5 billion and €12.5 billion. According to the report, KKR is likely to acquire a 20% stake in the biofuel company, with a successful conclusion expected within two to three weeks.
Eni’s Biofuel Strategy Attracts Investment
Eni’s decision to spin off Enilive, part of its larger strategy to focus on growth-oriented businesses, is drawing interest from a range of investors. As part of its 'satellite' strategy, the Italian company completed a deal in March to allow Swiss asset manager Energy Infrastructure Partners to invest in its retail and renewable unit, Plenitude.
Now, a second potential sale of Enilive to Stonepeak and others signals growing confidence in the company's biofuel trajectory.
Enilive manages biorefineries in Italy and other countries, utilizing waste and vegetable oil, much of which comes from Eni's agricultural business in Africa. It also produces biomethane and offers smart mobility services, with a network of more than 5,000 multi-fuel stations across Europe. The biofuel division is expected to generate €1.2 billion in earnings by 2025, implying a significant increase from €1 billion projected for 2024.
Biofuels to Play a Key Role in Eni’s Decarbonization Goals
Biofuels are positioned to be a crucial part of decarbonizing industries like trucking, aviation and shipping in the coming years. Enilive’s production from sustainable sources aligns with global green energy goals, driving strong interest from investors. With rising demand for biofuels and investors eager to participate, Eni’s Enilive unit is poised for future growth as it navigates this strategic sale.
E’s Zacks Rank & Key Picks
E currently has a Zack Rank #5 (Strong Sell).
Investors interested in the energy sector may look at a couple of better-ranked stocks like TechnipFMC plc FTI and Core Laboratories Inc. CLB, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
TechnipFMC is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry, with a focus on the subsea segment in offshore basins worldwide. FTI’s growing backlog ensures strong revenue visibility and supports margin improvements.
The Zacks Consensus Estimate for FTI’s 2024 EPS is pegged at $1.34. The company has a Zacks Style Score of B for Value and A for Growth. It has witnessed upward earnings estimate revisions for 2025 in the past 30 days.
Core Laboratories, an oilfield services company, has a deep portfolio of sophisticated, proprietary products and services that positions it to take advantage of the growing maturity in the global hydrocarbon reserve base. CLB’s expanding international upstream projects indicate a positive trajectory for revenues and profitability, especially as oil demand continues to rise globally.
The Zacks Consensus Estimate for CLB’s 2024 EPS is pegged at $0.95. The company has a Value Score of B. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
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