US food and agribusiness group Bunge is to buy Brazilian sugar and ethanol producer Moema for $452m in stock.


Under the terms of the deal, Moema’s controlling shareholders will get 7.3m shares in Bunge, which includes a $36m payment for working capital.


In the coming weeks, Bunge said it may enter into agreements to secure some or all of the remaining interests in the mills that constitute the Moema Group.


“This transaction fulfils Bunge’s strategic goal of building a large-scale, fully integrated business in sugar and bioenergy,” said Alberto Weisser, chairman and CEO of Bunge. “It adds significant scale to our current milling operations and enables us to vary production among multiple sugar and ethanol products, according to market conditions.


He added: “The Moema Group cluster is also strategically located near large domestic markets in Brazil and has excellent access to export logistics systems. All of these strengths make it a perfect fit with our global trading and marketing operations.”

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The Moema Group is located on the border of São Paulo and Minas Gerais
states, the two largest domestic ethanol markets in Brazil. The mills benefit from cost
savings due to their cluster configuration, and have favourable road and rail access to
three of Brazil’s largest export ports (Santos, Paranaguá and Vitória).


The cluster produces two types of sugar (raw and crystal) and two types of ethanol (hydrous and anhydrous).


Bunge has agreed to file a registration statement for the common shares issued
to the new shareholders, which will allow the shareholders to resell their common
shares from time to time.


Credit Suisse is serving as financial advisor to Bunge, and Itaú-BBA is serving as
financial advisor to the Moema Par shareholders.