Sweden’s Lundin Energy plans to use funds from divesting its petroleum business for mergers or acquisitions (M&A) to become an industry leader in renewable energy, its incoming CEO said on March 7.

Norway’s Aker BP last year struck a deal to buy Lundin’s oil and gas business in a $14 billion cash and stock transaction, leaving the Stockholm-listed company with only renewable assets. The deal is expected to close in June.

Lundin said it aimed to grow the renewable business into “an industry-leading energy company,” with scale and sufficient cash flow to provide a steady increase of shareholder returns.

“I think that we will start growing inorganically first, and we will start with the M&A … We are already active in the M&A space,” Daniel Fitzgerald, Lundin’s current COO and incoming CEO told Reuters.

“We have full support from the Lundin family to grow, and we have capacity to raise capital,” Fitzgerald said, referring to the company’s founding family.

Lundin has retained SEB investment bankers as advisers to support its growth ambition, he added.

“Initially, we will be looking at onshore renewable assets in the Nordic countries... We need to grow the scale first in the Nordics, before we look elsewhere,” Fitzgerald said.

Lundin was not looking at offshore wind assets, because those still required government subsidies and high capital investments, he added.

Fitzgerald said the company planned to announce targets for the renewable energy business during the second quarter of 2022.

Lundin fully owns a project to develop the 86-megawatt (MW) Karskruv wind farm in Sweden, and has 50% stakes in the 77-MW Leikanger hydropower plant in Norway and the 132-MW Metsalamminkangas wind farm in Finland.

The three are expected to produce a combined 600 gigawatt-hours (GWh) per year from late 2023.

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