Bunge Ltd. (BG), a leading global agribusiness and food company in the U.S., has recently completed the first phase of 100% acquisition of Usina Moema Participacoes S.A., a holding company that wholly owns one sugarcane mill in Brazil and has ownership interests in five others.
With this, Bunge has obtained 100% ownership of three of the mills (Moema, Frutal and Ouroeste), 70% of a fourth mill (Guariroba) and approximately 44% of a fifth mill (Itapagipe).
The company expects to acquire the remaining interests in the Guariroba and Itapagipe mills in the near future. Upon completion of the deal, Bunge will have a total sugarcane milling capacity of 13.7 million metric tons. The acquisition enables Bunge to vary production volumes among multiple sugar and ethanol products, according to the market conditions.
In addition, the mills of Usina Moema are located on the border of São Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil. The facilities have favorable road and rail access to Santos, Paranagua and Vitoria – three of Brazil’s largest export ports. The mills also have co-generation facilities and are self-sustaining in terms of energy requirements.
With the deal, Bunge has fulfilled its strategic goal of building a large-scale, fully integrated business in sugar and bioenergy. Brazil is also a fast-growing market for ethanol with the world’s lowest-cost production facilities. Bunge expects the acquisition to be accretive to earnings in the first 12 months.
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