HK's Cheng family in talks to acquire Varo Energy

Varo Energy runs hundreds of fuel stations throughout the Netherlands, Belgium, France and Germany. In April, it scrapped plans for an initial public offering due to unfavourable market conditions. It had US$13.4 billion (S$18 billion) of revenue in
Varo Energy runs hundreds of fuel stations throughout the Netherlands, Belgium, France and Germany. In April, it scrapped plans for an initial public offering due to unfavourable market conditions. It had US$13.4 billion (S$18 billion) of revenue in 2017.PHOTO: VARO ENERGY

HONG KONG • Hong Kong's billionaire Cheng family, which controls a real estate and jewellery empire, is exploring a bid for European fuel supplier Varo Energy, people with knowledge of the matter said.

The companies have held talks about a deal that could value Varo Energy, backed by investors including Carlyle Group, at about US$2.3 billion (S$3.1 billion), including debt, according to the people.

No final agreements have been reached, and there is no certainty the negotiations will lead to a transaction, the people said, asking not to be identified because the information is private.

Tycoon Henry Cheng has been pursuing acquisitions as he leads family-owned conglomerate Chow Tai Fook (Holding) beyond its property roots. The group completed its first foray into Australian utilities with the 2017 purchase of power producer Alinta Energy Holdings, Bloomberg-compiled data show.

Last month, an arm of the family's New World Development agreed to buy a Hong Kong insurer for US$2.75 billion.

Reggeborgh, a private Dutch investor, and Vitol Group, the world's biggest independent oil trader, also own stakes in Varo.

In April, the company - which has a head office in Switzerland and is registered in the Netherlands - scrapped plans for an initial public offering due to unfavourable market conditions.

Representatives for Varo, Carlyle, Reggeborgh and Vitol declined to comment. A spokesman for the Chengs' publicly traded retail business, Chow Tai Fook Jewellery Group, said she could not immediately comment on behalf of the family. A representative for their listed property flagship, New World Development, did not immediately respond to e-mailed queries.

The proposed Amsterdam Stock Exchange listing may have valued Varo at as much as US$2.3 billion, people familiar with the matter have said. Each of the company's three shareholders had planned to sell a third of their shares.

Varo runs hundreds of fuel stations throughout the Netherlands, Belgium, France and Germany. It also owns stakes in two refineries and controls about three million cubic m of fuel storage capacity, according to its website. The company had US$13.4 billion of revenue in 2017.

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A version of this article appeared in the print edition of The Straits Times on January 29, 2019, with the headline 'HK's Cheng family in talks to acquire Varo Energy'. Print Edition | Subscribe