LONDON, May 28 (Reuters) - Varo Energy, a joint venture between the world’s top oil trader Vitol and private equity firm Carlyle Group, is expanding its reach in Europe through a merger with Dutch-based storage and trading company Argos, the companies said on Thursday.
The deal will give Vitol, which will control a third of the new group, access to a wider swathe of northwest Europe beyond Varo Energy’s current presence in Switzerland and Germany.
It will combine Varo’s refinery holdings, including the 68,000 barrel per day (bpd) Cressier oil refinery, Switzerland’s last in operation, and a 45 percent stake in Germany’s Bayernoil refinery, with the storage operations of Argos, giving the group nearly 50 tank terminals in five northwest European countries.
“The merger brings together two strong and complementary companies to create a major downstream business in northwest Europe,” Varo Energy Chief Executive Roger Brown, who will lead the new group, said in a statement.
The new company will be called Varo Energy and will be divided equally between Vitol, Carlyle International Energy Partners (CIEP), part of the Carlyle Group, and the shareholders of Argos - Marcel van Poecke’s AtlasInvest and private investment group Reggeborgh, which represents the interests of the Dutch Wessels family.
Van Poecke, also CIEP managing director, has previously emphasised the importance of location and a distribution network in order to survive in the energy market.
As European refineries come under increasing pressure from massive new units in the Middle East and Asia, many are looking to deepen their involvement in the distribution chain in order to protect profits.
Argos has 21 tank terminals in Belgium, Luxemburg, France, Germany and Switzerland, as well as a network of service stations. It also has trading operations based in Rotterdam.
The terms of the deal were not disclosed, but it will not include the LPG and sea bunkering businesses of Argos. (Reporting by Libby George; Editing by David Holmes)