Winner: Raízen Acquisition of Biosev
The acquisition of Brazilian ethanol producer Biosev by renewable energy group Raízen, which finally closed in August 2021, was months in the making. The deal saw Raízen purchase 100% of the company previously owned by commodities trader Louis-Dreyfus Company (LDC) which was facing severe financial challenges at the time.
Biosev’s debt amounted to $8 billion, and one of the main challenges was creating a structure that accommodated the interests of all parties involved, while integrating a debt-free Biosev into the Raízen group.
Through the deal, Raízen acquired 9 ethanol and sugar plants, taking its total to 35, thus increasing its capacity to produce ethanol by 54%, and sugar, by 31%.
Raízen CFO Guillerhme Cerqueira says the deal made perfect sense for the company, given its long-term priorities, in partiular investing in the production of non-fossil fuels, including biomass.
“The Biosev acquisition has a strategic fit with Raízen’s ambition to lead the energy transition, aligned with the global agenda for a low-carbon economy,” he tells LatinFinance. “This transaction is already contributing to maximize business opportunities strengthening the entire value chain of our ecosystem.”
It took six months for the deal to be concluded as several steps needed to be fulfilled, including the delisting of Biosev, which required the approval of minority shareholders that owned 6% of the company; agreements with lenders to refinance the debt through a closely-held holding company controlled by LDC; and a capital increase for Biosev to finance part of the debt.
In the end, Raízen closed the transaction by transferring 3.5% of its own shares to the closely-held company, in a deal estimated at R$3.6 billion. Raízen is owned by global energy and petrochemicals company Shell and Brazilian agribusiness group Cosan.- LF