EU approves Trafigura’s takeover of biofuels giant Greenergy

The European Commission has approved the proposed takeover of the European business of British biofuel producer Greenergy by commodities trading giant Trafigura.

After examining the proposed transaction under the EU Merger Regulation, the Commission concluded that it would not raise competition concerns as the companies would have limited combined market power as a result of the transaction.

Trafigura announced in March that it had entered into an agreement to acquire the European business of Greenergy from Brookfield Asset Management and its listed subsidiary Brookfield Business Partners for an undisclosed sum.

Founded in 1992, Greenergy is now one of the largest biofuel suppliers in Europe, with production facilities in the UK and the Netherlands, and a leading distributor of road fuels in the UK.

“The acquisition of Greenergy represents a unique opportunity for Trafigura to strengthen its fuel supply operations in Europe and add physical production and distribution of renewable fuels to its growing biofuels business,” the commodities trading giant said at the time.

Ben Luckock, Global Head of Petroleum at Trafigura, commented: “As Europe transitions to a lower carbon future and the refining industry adapts to changing market dynamics, companies like Greenergy become increasingly important.”

Trafigura and other oil trading giants have made huge profits over the past two years during a period of uncertainty and volatility. They are now looking to reinvest some of their profits in expanding their refining and biofuel supply businesses.

Trafigura said in April that Rhône Energies, its consortium with Entara LLC, had entered exclusive negotiations to buy the Fos-sur-Mer refinery and terminals in Toulouse and Villette de Vienne from ExxonMobil’s local unit, Esso.

The commodities trading industry now has the means to strategically reinvest in long-term trades and strategic decisions, according to consulting firm Oliver Wyman. One winning move in reinvesting windfall profits could be investing in assets “that give traders greater optionality and influence over the commodities they trade,” Oliver Wyman said in a report earlier this year.

By Tsvetan Paraskov for Oilprice.com

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