BRAZIL – Brazilian petroleum giant Petrobras and Tereos Participações have formed a strategic partnership to invest in Açúcar Guarani S.A. (Guarani), a Tereos group subsidiary, aiming to accelerate its growth in the Brazilian ethanol, sugar and bioenergy industry.

Investments will also be increased in technology and in research and development programs for new generations of biofuels.

Petrobras, through its Petrobras Biocombustível subsidiary, will acquire stakes in Guarani’s capital stock, and invest, in stages, R$1.6 billion in it, assuming a price per share of R$5.83. At the end of the investments, it will hold 45.7 per cent equity interest in Guarani, the fourth biggest sugarcane processor in Brazil.

Petrobras Biocombustível will bring the group’s expertise in distribution, in manufacturing operations, in logistics, in ethanol and energy marketing, and in research and development to Guarani.

Tereos Internacional will contribute to the society via their experience in agribusiness, in sugarcane processing, and in ethanol and sugar marketing. The partnership meets the common goals the partners have to invest in growing their participation in the sugar and energy sector.

Petrobras said the partnership puts Guarani in very good position, holding a determining role in the growth and consolidation of the sugarcane processing industry. The investments will focus on developing a new generation of biofuels and energy cogeneration (the simultaneous generation of electricity and thermal energy from a single source).

Petrobras’ CEO, José Sergio Gabrielli de Azevedo, said: “In compliance with Petrobras’ Business Plan, this is a significant move in the biofuels sector, taking a step towards the consolidation of the Company as an energy company, sustainably, since it will contribute to the achievement of Petrobras Biocombustível’s ethanol production targets.”

To Miguel Rossetto, CEO of Petrobras Biocombustível said: “The choice to make a relevant investment in Guarani took into account the company’s operating and management quality, as it is a traditional player in the industry and has practices that are compatible with those required by Petrobras; the fact it is located in the State of São Paulo, the biggest ethanol consumer and producer market in Brazil, a fact that will facilitate logistics and synergy with the Petrobras System; the opportunity to participate jointly in the strategic decisions; and the company’s growth project, investing in ethanol production.”

Alexis Duval, the international director for Tereos said: “It is a privilege for Guarani to have been ed by Petrobras, one of the most respected among the world’s leading energy companies. The agreement consolidates the strong position we have built in Brazil via Guarani and significantly strengthens not only Tereos Internacional’s position in the sugarcane sector, but also its ties to Brazil, a month after its creation was announced. The partnership creates a fantastic platform on which to consolidate a leadership position in the industry.”

Jacyr Costa Filho, the CEO of Guarani added: “This joint agreement with Petrobras opens a new era of growth for Guarani. Joining forces with one of the largest energy companies in the world, Guarani will have resources and expertise to become a global player, the leader in the fast-growing bioenergy market.”