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Raízen speed up talks to acquire Dreyfus's sugar-and-ethanol business

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Raízen, a joint venture between Cosan and Shell, is close to cut a deal to acquire Biosev, a sugar-and-ethanol company controlled by Louis Dreyfus, according to sources.

Negotiations have gained traction in recent days but still depend on a solution on Biosev's debt pile - R$7.6 billion in the second quarter of the 2020/21 crop - and on a decision over the sugar export terminal Biosev operates in the Port of Santos with Cargill, one source familiar with the matter says.

The deal is expected to involve a share exchange. Yet Raízen does not want to take all the competitor's heavy debt, a source who spoke on condition of anonymity says. In addition to being high, a substantial chunk of the debt, of around R$3 billion, matures already in the next crop (2021/22), which starts in August.

Another alternative would be paying in cash, but this also depends on the rebate on the debt Biosev will get from bank creditors.

The source says Raízen is not interested either in taking Biosev's 50% stake in the terminal. The reason is Cosan already has export terminals focused on sugar and grain in Santos.

Raízen and Biosev declined to comment. Biosev's board, composed of five representatives of Dreyfus and three independent directors, authorized the management team to move forward with the talks on January 15.

The board also decided that the executives can file for a "potential transaction" with the Administrative Council of Economic Defense (Cade) - even before talks are concluded and the final agreements are signed.

The information is included in the minutes of the board's...

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