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Bunge, BP Form Joint Venture To Create A Bioenergy Company In Brazil

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Bunge Limited (NYSE: BG) announced an agreement with BP plc (NYSE: BP) to form a 50/50 joint venture that will create a bioenergy company in Brazil.

Bunge will receive cash proceeds of $775 million in the transaction. The joint venture, to be called BP Bunge Bioenergia, will operate on a standalone basis, with a total of 11 mills located across the Southeast, North and Midwest regions of Brazil.

"This partnership with BP represents a major portfolio optimization milestone for Bunge which allows us to reduce our current exposure to sugar milling, strengthen our balance sheet and focus on our core businesses,” said Gregory Heckman, Bunge CEO. “We have a strong, committed partner in BP, as well as flexibility in the medium and long term for further monetization, with full exit potential via an IPO or other strategic route."

Bunge shares were trading up 1.7% at $56.55, while BP shares were trading around $39.17 at time of publication.

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Posted-In: BP Bunge Bioenergia brazilNews Contracts Global