Raízen, an integrated energy company and a benchmark in biofuels and bioelectricity, signed a commercial agreement to incorporate the assets of Biosev, a Brazilian subsidiary of Louis Dreyfus Holding.
The deal includes nine production units strategically located in Brazil (six in the state of São Paulo, two in Mato Grosso do Sul and one in Minas Gerais), with a total installed sugarcane processing capacity of up to 32 million tons.
The agreement also includes power cogeneration, with an export capacity of up to 1.3 GWh of electricity/year, covering an area of 280,000 hectares of planted sugarcane.
Raizen, a competitive player in the market for 10 years, enjoys a high level of operational efficiency and financial discipline. Raízen has consolidated a fully-integrated business model that enables to offer its customers energy solutions within an increasingly clean and renewable energy matrix.
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This incorporation with Biosev’s assets is in line with the company’s goal of leading the energy transition and intersects perfectly with the current global agenda that is progressively moving toward a low-carbon economy.
Ricardo Mussa, Raízen’s CEO:
Further to the expansion of the production of ethanol, sugar and bioenergy
“This incorporation with Biosev, is an opportunity to leverage technology that drives productivity and the use of sugarcane in biorefineries, with the possibility of expanding our second-generation ethanol and biogas businesses.”
The global trend towards the increasing relevance of renewable sources is creating a positive environment for our businesses, which has been accelerated by the pandemic and leveraged by public policies, such as Renovabio. This same trend resulted in increased prices of sugar in the international market.
Considering this current scenario, this incorporation with Biosev has the potential to help strengthen the entire sugar-energy production chain, solidify partnerships and support suppliers.
“We want to grow together and generate shared value, while also incorporating a diverse and integrated team, that is guided and respects safety, which by the way is a non-negotiable value to us,” added Mussa.
This incorporation strictly follows the principles of capital discipline and will have no impact on Raízen’s financial leverage, preserving the company’s credit profile —Raízen is currently rated investment grade by the three main international rating agencies.
It is important to note that a few pre-required conditions must be met and that the agreement must be approved by CADE, to whom the incorporation documents have already been submitted for evaluation.
With this incorporation, Raízen would own 35 production units, with an installed capacity of 105 million tons of sugarcane, and approximately 1.3 million hectares of cultivated land.
About the transaction
The transaction involves an exchange of shares and payment in cash, since Biosev’s assets will be consolidated net of debt.
Once the transaction is completed, Biosev will become a subsidiary of Raízen and its current shareholders will migrate to a holding company that will own a minority interest in the incorporated entity, without voting rights.
✔️ The deal strengthens Raízen’s leadership towards its energy transition goals by expanding its offering of clean and renewable energy.
Raízen Signs Agreement to Incorporate Biosev, aiming a Competitive and Sustainable Expansion within the Sugar-Energy Sector, São Paulo, February 8, 2021
