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J. P. Morgan Will Assist BP Bunge In The Transaction. Companies Like Mubadala And Raízen Are Among Those Interested In The Purchase Of The Sugar And Ethanol Joint Venture
The newspaper Valor Econômico reported on Tuesday (the 9th) that the British oil company BP and the American commodities trader Bunge have decided to sell their Brazilian sugar and ethanol joint venture, BP Bunge Bioenergia.
According to the report, the Mubadala fund from Abu Dhabi and the Brazilian energy company Raízen are among those interested in acquiring BP Bunge. Raízen had even assessed Bunge’s assets previously, but the negotiations did not pick up.
Sources consulted by Valor Econômico also highlighted that BP Bunge’s shareholders are considering selling the assets separately.
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J.P. Morgan will be the company responsible for advising BP Bunge during the sales process. According to the report, the company’s assessment indicates that the assets of the sugar and ethanol joint venture are valued between R$ 9 billion and R$ 10 billion (US$ 1.96 billion). The analysis also shows that this amount takes into account a value between US$ 55 and US$ 60 per ton of crushed sugarcane.
To Valor Econômico, Bunge sent a statement asserting that it continues to evaluate alternatives to divest its stake in the sugar and ethanol joint venture. Additionally, the trader also stated that it is satisfied with the performance of its operations, but the assets are not fundamental to its overall business strategy.
BP and Raízen Refused To Comment On The Status Of The Ongoing Business. The Sale Of BP Bunge Is Still In The Non-Binding Proposal Phase
BP and Raízen declined to comment on the matter when contacted by Reuters. Bunge, Mubadala, and J. P. Morgan, for their part, did not provide an immediate response to the email requests for comment.
The sources consulted by Valor also clarified that the sale process of BP Bunge is still in the non-binding proposal phase, meaning that the companies are receiving offers, such as from Raízen or Mubadala, but there is no exclusivity contract between the parties. Furthermore, the report also mentions that the deal is not expected to be finalized before the elections, which will take place in October this year.
Finally, the individuals consulted stated that initially only the Bunge intended to sell its 50% stake in the joint venture. However, in the last two months, BP has shown interest in also exiting the partnership.
BP and Bunge announced their agreement to create the sugar and ethanol joint venture about three years ago, in 2019. The partnership manages 11 mills, with a total crushing capacity of 32.4 million tons of sugarcane per year. In the 2021/2022 season, the company’s net revenue was R$ 7.2 billion, while the net profit was approximately R$ 1.7 billion.
About BP Bunge Bioenergia
BP Bunge Bioenergia is a young company, established in December 2019, through the merger of the sugar and ethanol businesses of the BP and Bunge groups in Brazil. The company operates throughout the production process and also sells bioenergy and sugar derived from sugarcane. It also stands out for contributing to the energy transition in the country.
