Bunge acquires Brazilian sugar producer Moema Par for $896 million

Bunge Limited, US agribusiness giant has agreed to buy Brazil's Usina Moema Participações SA (Moema Par), an owner of sugar mills for a transaction value of approximately $896 million including debt, marking a further consolidation in Brazil's fast growing sugar and ethanol industry.

Moema Par is the holding company that owns one sugarcane mill and has ownership interests in five others with a total annual capacity of 15.4 million tonnes. Through the deal Bunge will have a 60 per cent effective share of the total capacity, representing Moema Par's wholly owned mill and its stakes in four of the five other mills.

Under the terms, shareholders of Moema Par will get approximately 7.3 million common shares of Bunge, which includes a payment of about $36 million in working capital. Based on Thursday's closing price of Bunge's shares, the transaction is valued at $896 million including $480 million of net debt and excluding the working capital, Bunge said in a statement.

New York-based Bunge is a leading global agribusiness and food company spread over 30 countries and employing around 25,000 people. The company supplies fertilizers, originates and processes oil seeds, grains and agricultural commodities, produces food products and supplies raw materials and services to the biofuels industry.

Through the acquisition, the company plans to more than double its sugar and bioenergy business in Brazil. At present, Bunge operates two sugar mills and building a third one in the country.

The Moema Group cluster of the six mills is located on the border of São Paulo and Minas Gerais states, the two largest domestic ethanol markets in Brazil.