São Paulo, February 8th, 2021 – Raízen, an integrated energy company and a benchmark in biofuels and bioelectricity, signed a commercial agreement to incorporate the assets of Biosev, a Brazilian subsidiary of Louis Dreyfus Holding. The deal includes nine production units strategically located in Brazil (six in the state of São Paulo, two in Mato Grosso do Sul and one in Minas Gerais), with a total installed sugarcane processing capacity of up to 32 million tons. The agreement also includes power cogeneration, with an export capacity of up to 1.3 GWh of electricity/year, covering an area of 280,000 hectares of planted sugarcane.

Raizen, a competitive player in the market for 10 years, enjoys a high level of operational efficiency and financial discipline. Raízen has consolidated a fully-integrated business model that enables to offer its customers energy solutions within an increasingly clean and renewable energy matrix. This incorporation with Biosev’s assets is in line with the company’s goal of leading the energy transition and intersects perfectly with the current global agenda that is progressively moving toward a low-carbon economy. “Further to the expansion of the production of ethanol, sugar and bioenergy, this incorporation with Biosev, is an opportunity to leverage technology that drives productivity and the use of sugarcane in biorefineries, with the possibility of expanding our second-generation ethanol and biogas businesses,” said Ricardo Mussa, Raízen’s CEO.

The global trend towards the increasing relevance of renewable sources is creating a positive environment for our businesses, which has been accelerated by the pandemic and leveraged by public policies, such as Renovabio. This same trend resulted in increased prices of sugar in the international market. Considering this current scenario, this incorporation with Biosev has the potential to help strengthen the entire sugar-energy production chain, solidify partnerships and support suppliers. “We want to grow together and generate shared value, while also incorporating a diverse and integrated team, that is guided and respects safety, which by the way is a non-negotiable value to us,” added Mussa.

This incorporation strictly follows the principles of capital discipline and will have no impact on Raízen’s financial leverage, preserving the company’s credit profile —Raízen is currently rated investment grade by the three main international rating agencies. It is important to note that a few pre-required conditions must be met and that the agreement must be approved by CADE, to whom the incorporation documents have already been submitted for evaluation. With this incorporation, Raízen would own 35 production units, with an installed capacity of 105 million tons of sugarcane, and approximately 1.3 million hectares of cultivated land.

About the transaction

The transaction involves an exchange of shares and payment in cash, since Biosev’s assets will be consolidated net of debt. Once the transaction is completed, Biosev will become a subsidiary of Raízen and its current shareholders will migrate to a holding company that will own a minority interest in the incorporated entity, without voting rights. The diagram below illustrates the new structure:

* The stock participation percentages represented in this structure chart are mathematically rounded.
** Upon the redemption of the Redeemable Shares (temporary), the participation of each Shell and Cosan in the share capital will increase to: 48,25%.

About Raízen

We are Raízen—an integrated energy company and the benchmark in biofuels. We operate throughout the entire sugarcane production chain, up to fuel sales, logistics and distribution. Our energy is essential to move people and leverage businesses. Therefore, in addition to delivering the energy the market needs today, we invest in solutions within the global agenda of a gradual and sustainable energy transition . We are leaders in the production of biofuels and bioelectricity from sugarcane, and continue to invest in expanding our portfolio of renewable energy sources, including second-generation ethanol (E2G), biogas, biomass and solar power.

With a team of 29,000 employees, we operate 26 sugar, ethanol and bioenergy production units—and a 2G ethanol plant—with an installed capacity for processing 73 million tons of sugarcane, which in the 2019-2020 crop year produced approximately 2.5 billion liters of ethanol and 3.8 million tons of sugar. We own 860,000 hectares of agricultural land cultivated using state-of-the-art technology, including 100% mechanized harvesting. Our installed capacity for energy generation is approximately 1GW and, in the last harvest, we produced 2.1 TWh of electrical energy from sugarcane biomass. In the 2019-2020 crop year, we sold approximately 26.9 TWh of energy in the free energy market through a joint venture with WX Energy, strengthening our trading activities in this market.

With a network of more than 6,000 Shell gas stations in Brazil and Argentina, we have the required coverage and distribution channels to deliver the energy our customers demand. And through the NÓS Group (a joint-venture with Femsa), we operate in the retail segment with more than 1,000 Shell Select convenience stores in gas stations and with OXXO proximity stores, an established brand in Latin America. In the B2B and retail segments during the 2019-2020 cycle we sold approximately 27.1 billion liters of fuel operating in all regions of Brazil from 67 airport supply bases and 67 fuel distribution terminals. In Argentina, where operate under the Shell brand since 2018, and in the last cycle sold 6.1 billion liters of fuel and maintained a network of approximately 730 Shell stations, one refinery, one lubricant plant, four land terminals and two supply bases at airports.

Raízen is one the largest companies in Brazil in terms of revenue (R$ 120.6 billion in the 2019-2020 crop year). We create jobs and income, thereby helping the economy grow, and invest in social responsibility initiatives by supporting several projects. Through the Raízen Foundation, we offer complementary education to young people, encouraging socially vulnerable individuals to discover their professional abilities and thread their own paths. We also cooperate with the communities in which we operate. More than 1,700 students in the 2019-2020 crop year benefited from our programs, as we reached an additional 3 million people by providing professional training, education and citizenship awareness.