BP is set to take full ownership of Brazilian biofuel producer bp Bunge Bioenergia by acquiring the 50% stake of its joint venture (JV) partner Bunge in a deal worth around $1.4bn.
The JV company was formed in December 2019 by combining the Brazilian ethanol, sugar, and biopower businesses of BP and Bunge.
Bunge CEO Greg Heckman said: “We are pleased with the way the business is operating and the great work the team has done to become a leader in sugar and bioenergy since we created this joint venture with BP.
“However, this business is not core to Bunge’s long-term strategy and this transaction will allow us to focus and invest in our core businesses while also further strengthening our balance sheet.”
After completion of the latest deal, BP will be capable of producing approximately 50,000 barrels per day of ethanol equivalent from sugarcane. This production will take place across bp Bunge Bioenergia’s 11 agro-industrial units spread across five states in the Southeast, North, and Midwest regions of Brazil.
bp Bunge Bioenergia is said to utilise an integrated business model that spans the entire production chain from ethanol and sugar production through to sales.
BP anticipates that 100% ownership will enable the exploration of additional growth prospects in the region and the advancement of new bioenergy platforms. These include next-generation ethanol, sustainable aviation fuel (SAF), and biogas.
Concurrently with this acquisition, BP is reducing its expansion plans for SAF and renewable diesel biofuels projects at its current sites. It is halting the planning for two potential projects while evaluating the progress of three others.
The decision is said to be in line with BP’s strategy to streamline its portfolio, emphasising value and returns.
BP customers and products executive vice president Emma Delaney said: “bp Bunge Bioenergia is widely recognised as a leader in the industry. I am excited by the opportunity for bp to now add further value from our trading and technology capabilities.
“BP was an early entrant into the bioenergy business in Brazil and we look forward to continuing to grow and develop here.”
The completion of the acquisition is contingent upon regulatory approvals and is expected to finalise by the end of 2024.
