Brazil’s antitrust watchdog CADE approved the acquisition of ethanol producer Biosev by Raizen, a joint venture between Brazilian ethanol producer Cosan and Royal Dutch Shell.
The cash and stock deal was approved with no restrictions, according to the decision published on Tuesday, March 2, in Brazil’s official gazette.
Raizen will pay 3.6 billion reais (US$670.3 million) to Biosev shareholders, who will also receive 3.5% of Raizen preferred shares, plus 1.49% of redeemable shares, it said in a regulatory filing. The company declined to disclose the full purchase price.
The deal boosts Raizen’s position as the world’s largest sugar maker at a time when sugar prices are near the highest levels in four years. It also increases Raizen’s footprint in South America’s energy market.
After the acquisition, the company will operate 35 mills in Brazil with a sugar cane crushing capacity of 105 million tonnes per year, equivalent to 17% of Brazil’s center-south crop in 2019/20. Biosev and Raizen produced nearly 5 million tonnes of sugar and 3.84 billion liters of ethanol in 2019/20.
“It was a great opportunity. Biosev has good plants; they have a good operation. The problem there was financial, not operational,” Raizen’s Chief Executive Ricardo Mussa told Reuters.
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