Factbox: Mergers, takeovers in Brazil's ethanol industry

Mergers and acquisitions have transformed Brazil's once family-owned sugar and ethanol industry into a smaller number of big, professional and often international corporations since the 2008 credit crisis.

Although deep-pocketed milling groups are now resuming some investments in a limited number of greenfield projects to expand crushing capacity, takeovers are still seen as the easiest way to enter and grow in the cane sector, which still bears the scars of the global financial crisis.

Many milling groups and investors that had highly leveraged their expansion plans in the heady days of 2008, when oil reached $147 a barrel, were devastated when global credit system locked up later that year.

Following are some of the major M&A deals over the past few years:

* U.S. agribusiness giant Cargill earlier in June created a joint venture with Brazilian cane group Usina Sao Joao (USJ) to operate in sugar, ethanol and bioelectricity.

* Cosan, Brazil's largest sugar and ethanol processor, said earlier in June it raised the debt it will transfer to Raizen, its joint venture with Royal Dutch Shell that began operating on June 1. The deal was originally announced in April 2010.

* Brazil's state-run oil company Petrobras will expand its role in the production of ethanol, the energy minister Edison Lobao said in May, as Brazil tries to keep rising fuel prices at the pump from worsening inflation.

* U.S. agricultural company Archer Daniels Midland in April agreed to buy the remaining 51 percent stake in Brazil's Limeira do Oeste ethanol mill, making it the plant's sole owner.

* Oil major BP has agreed to buy a Brazilian sugar and ethanol group for $680 million, expanding its presence in Brazil's biofuels industry in what it said was the largest deal to date for its alternative energy unit.

* Swiss-based Glencore, considered the world's largest diversified commodities trading house, said in December it would more than double the capacity of its Rio Vermelho cane mill after it bought a 76 percent stake in the company for more than $80 million in its first-ever investment in the sector.

* Noble Group, Asia's biggest commodities trader, in December paid $950 million for two Brazilian cane mills, expanding Singapore-listed company's two existing mills' crushing capacity by 84 percent.

* India's top refiner Shree Renuka Sugars in June, 2010, struck a deal to buy a majority stake in Equipav SA Acucar e Alcool, for $250 million.

* Brazil's largest cane processor, Cosan, signed a deal in January to purchase Brazilian rival Zanin cane group, for around $225 million, raising its total numbers of mills to 24.

* In June 2010, Acucar Guarani, the Brazilian branch of French group Tereos, said it had bought the Mandu mill in Sao Paulo state for about $200 million, increasing its processing capacity to about 20.6 million tonnes of cane a year.

* State-run oil company Petrobras said also in June it would invest about $246 million to acquire a 49-percent stake in two units of the Sao Martinho milling group.

* In April, Petrobras had announced the purchase of a 46-percent stake in Acucar Guarani SA. The oil company had bought a stake in Total Agroindustria Canavieira ethanol mill in December 2009.

* In December 2009, U.S. agricultural company Bunge Ltd agreed to pay $452 million in stock for Brazilian sugar and ethanol producer Moema.

* The Brazilian unit of French commodities group Louis Dreyfus said in October 2009 it would take over Brazilian firm Santelisa Vale to create the world's second-largest sugar cane processor.

source: reuters