bp has agreed to acquire Bunge’s 50% holding interest in its bp Bunge Bioenergia S.A. joint venture, one of Brazil’s leading biofuels-producing companies.
Upon completion, bp will become sole owner of the industrial scale sugarcane and ethanol business, enabling bp to accelerate value creation through integration with bp’s trading and technology capabilities.
The enterprise value of the stake to be acquired is approximately $1.4 billion. The acquisition will result in consolidation of 100% of the venture’s financial results, including net debt of approximately $0.5 billion and lease obligations of approximately $0.7 billion.
The acquisition meets bp’s expected returns threshold for bioenergy of more than 15% and is fully accommodated within bp’s disciplined financial framework, including capex targets of around $16 billion in each of 2024 and 2025.
Following completion, bp will have the capacity to produce around 50,000 barrels a day of ethanol equivalent from sugarcane through bp Bunge Bioenergia’s 11 agro-industrial units across five Brazilian states. The company operates with an integrated business model that covers the entire production chain through to sales of ethanol and sugar.
bp believes ownership will also offer the potential to unlock further growth opportunities in the region, and to develop new platforms for bioenergy such as next generation ethanol, sustainable aviation fuel (SAF) and biogas.
Read more on the bp website here: https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-to-acquire-full-ownership-of-bp-bunge-bioenergia-while-refocusing-plans-for-new-biofuels-projects.html
