Emerging Markets: Brazil

Roundup

 

By Antonio Guerrero

 

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Brazil’s leading ethanol processor seals deal with Shell

Brazil's Cosan, the world's largest ethanol and sugar processor, and Royal Dutch Shell are merging their Brazilian operations in a deal valued at $12 billion. Under the plan, Cosan's sugar and ethanol production and distribution units, energy co-generation and fuel distribution business will be merged with Shell's fuel distribution and biomass development operations under two new companies. One company, A&E, will operate the sugar, ethanol and energy co-generation units, while another, DS, will operate the fuel distribution segment. DS will have a network of 4,500 gas stations throughout Brazil, making it the country's third-largest fuel distributor. Under the terms of the deal, Cosan and Shell after 10 years will have an option to buy out each other's stakes in the joint venture, projected to have $21 billion in annual sales.


Braskem, Latin America's largest petrochemicals producer, is acquiring a 100% stake in Sunoco Chemicals, a division of US-based oil company Sunoco, for $350 million. The deal is expected to be finalized by March 31 and includes polypropylene plants in Pennsylvania, Texas and West Virginia. Braskem plans to issue some $3 billion in new stock to fund its expansion, which included January's acquisition of local competitor Quattor.


Brazilian banks are also leading an international acquisitions drive. Federally controlled Banco do Brasil is taking a majority stake in Banco Patagonia, Argentina's fifth-largest private bank. Bradesco, Brazil's second-largest private bank, is acquiring Banco Ibi México, marking its first foray into overseas retail banking. Bradesco last year acquired Banco Ibi's Brazilian operations.

 

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