With the transaction, Tereos will become the sole shareholder of Guarani, as it already owns 54.03% stake in it.

However, the completion of the transaction needs an approval from the Brazilian competition authorities.

Following the acquisition, Tereos plans to rename Guarani as Tereos Açúcar e Energia Brasil.

Tereos claims to be the third largest sugar producer in Brazil, through its subsidiary Guarani. In a market which is constantly growing, Tereos sees its production position as a key strategic asset for the company.

For the 2016/17 season, Guarani produced 1.6 million tonnes of sugar from sugar cane production close to 20 million tonnes. It also produced about 630 million litres of ethanol and commercialised more than 1GWh of bio-electricity to the grid.

Guarani has seven sugar and ethanol facilities are located in Andrade, Cruz Alta, São Jose, Severinia, Mandu, Tanabi and Vertente and has two refineries in Cruz Alta and Andrade.

Tereos CEO Alexis Duval said: "This transaction follows Petrobras’ announcement to refocus on its core business of oil and natural gas exploration and production.

“For Tereos, this acquisition is an opportunity to strengthen its foothold in Brazil, the number one sugar-producing country in the world.”

Image: Tereos to pay $202m to acquire stake in Guarani. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.