Petrobras considers potential investment in Raizen to re-enter ethanol market - report
Petrobras is considering an investment in Raizen, a major Brazilian sugar and ethanol producer, as part of its strategy to re-enter the ethanol market, transitioning from its previous plan to exit biofuel production entirely.
Raizen is facing financial challenges and is looking for a new partner, which aligns with Petrobras's potential interest in either partnering with Raizen or acquiring some of its assets.
A decision by Petrobras regarding this investment opportunity is expected by the end of the year, reflecting a significant shift in its strategic direction.
Raizen, the world's largest sugar producer, has experienced disappointing financial results, contributing to its stock hitting an all-time low in Brazil.
Investment Consideration: Petrobras Looks to Partner with Raizen
Petrobras (NYSE:PBR) is currently exploring the possibility of investing in the Brazilian sugar and ethanol producer, Raizen. This initiative reflects Petrobras' strategy to re-enter the ethanol market, as reported by O Globo on Saturday, citing anonymous sources.
This development suggests a significant shift from Petrobras' strategic plan executed between 2017 and 2021, which aimed for a complete exit from biofuel production. Raizen, on the other hand, is actively seeking a new partner to help it navigate challenging financial conditions.
According to O Globo, Petrobras is expected to reach a decision by the end of the year and is considering multiple paths forward. These options include either forming a partnership with Raizen or acquiring some of the company's assets.
Raizen stands as the world’s largest sugar producer and a prominent player in the ethanol sector. The company is jointly owned by Shell (SHEL) and the Brazilian conglomerate Cosan (CSAN).
Additionally, Raizen recently indicated the potential for a new investor to come on board, following disappointing financial results that resulted in its shares hitting an all-time low in Brazil.