Oil major BP has agreed to buy a Brazilian ethanol producer for $680 million, expanding its presence in the country’s biofuels industry in what it said was the largest deal to date for its alternative energy unit.
BP, which has spent recent months reshaping its portfolio as it looks to put the Gulf of Mexico oil spill behind it, said on Friday it would pay $680 million for an 83 percent stake in ethanol and sugar firm Companhia Nacional de Acucar e Alcool (CNAA).
The deal is expected to increase BP’s Brazilian production capacity to around 1.4 billion litres of ethanol equivalent per year from the current 435 million litre level, said the company, adding that it was the largest deal ever done by BP Alternative Energy.
“This acquisition is a key milestone in our strategy of building a leading position in sustainable and scalable biofuels,” said Philip New, Vice President of BP Biofuels in a statement.
BP said in November it was focusing its biofuel efforts on Brazilian sugar cane and U.S. energy grasses, holding off from making investments in the rest of the world for the timebeing.
Thanks and Source Reuters