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Thursday, September 29, 2022

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    Raízen (RAIZ4) and Mubadala compete for BP Bunge in final bid round

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    Raízen, which is already the largest ethanol producer in the country, with 106 million tonnes of sugarcane crushing capacity, (Image: REUTERS/Nacho Doce)

    The Brazilian root (ROOT4) and the state investor in United Arab Emirates Mubadala are in the final round of a bid to acquire the Brazilian joint venture of sugar and ethanol BP Bunge Bioenergiathe third largest processor of sugar cane in the world, said a source familiar with the matter.

    There are no other interested parties in the second round of bids, and previous bids from other companies were disqualified, the source said, requesting anonymity to disclose private conversations.

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    Shareholders BP PLC and Bunge Ltd decided to negotiate with both bidders in a second phase because the difference between their bids was so small, according to the source.

    Although the deal is in its final stages, there is no clear deadline for a deal, nor a guarantee that a sale will close.

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    BP and Mubadala did not immediately comment on the matter. The Raízen joint venture between shell and Cosan (CSAN3), declined to comment.

    Bunge said it continued to evaluate options to exit its stake in the sugar and ethanol company.

    Bunge added that the deal is not the core of its overall strategy.

    Bunge has been trying to divest in its ethanol plants in Brazil for some time. In 2018, it briefly considered an initial public offering, but the following year created a joint venture with BP.

    The newspaper Valor Econômico reported on Tuesday about the sale and the interest of Mubadala and Raízen.

    BP Bunge Bioenergia has 11 production units with a sugarcane crushing capacity of 33 million tons.

    The deal could be worth US$1.8 billion, considering US$55 per ton of crushing capacity.

    The source declined to comment on the value of the deal.

    This would be Mubadala’s first investment in ethanol in Brazil. The Middle Eastern investor owns Enviva Partners in the US, which produces around 5 million tonnes of wood pellets used by companies in Europe and Japan for power generation instead of coal.

    Raízen, which is already the largest ethanol producer in the country, with 106 million tons of sugarcane crushing capacity, would consolidate its leadership.

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    Source: Moneytimes

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