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Brazil's Raizen Buys Shell Downstream Assets in Argentina for $950 mln

Reuters
25/04/2018 15:29
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Brazil's Raizen Combustiveis SA agreed to buy downstream assets in Argentina from Royal Dutch Shell PLC for $950 million, according to a securities filing on Tuesday.

 

Raízen Combustiveis, a joint venture between Brazil´s Cosan SA Indústria e Comércio and Shell, will have a 20 percent market share in fuel distribution in Argentina after acquiring a network of 645 gas stations in the country.

 

Raízen also is acquiring a refinery in Buenos Aires, LPG and aviation fuel terminals and a lubricant plant, among others, which have an annual net revenue of $3.3 billion.

 

Reuters first reported that Raízen would buy the business last August.

 

The deal in Argentina is similar to the model Shell operates in downstream assets in Brazil. The network of 6,200 gas stations that uses the Shell brand is owned by its joint venture with Cosan.

 

During the sale process, Raízen´s bid topped rival offers by Argentine oil company YPF SA, Chile's Quinenco SA and China National Petroleum Corp's Petrochina Co.

 

The businesses acquired by Raízen will continue their relationships with Shell through various commercial agreements, representing an estimated value of $300 million, Shell said https://go.shell.com/2HntfeH.

 

The Anglo-Dutch company said it will keep its upstream interests in the Vaca Muerta shale formation, which was not included in the Raízen deal, as it "sees substantial long-term growth potential in Argentina's shale resources."

 

The sale is part of Shell's strategy to simplify its portfolio through a $30 billion divestment program by 2018, and follows a strategic review of the downstream business in Argentina that began in August 2016.

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