Merger Leads to Creation of Sugar and Ethanol Giant in Brazil

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Researched by Industrial Info Resources (Sugar Land, Texas)--The merger of Brazilian companies Louis Dreyfus Commodities Brasil SA (LDC Brasil) (Sao Paulo) and Santelisa Vale Bioenergia SA (Sertaozinho) has resulted in the creation of LDC-SEV Bioenergia (Sao Paulo), the second-largest sugarcane crusher in the country.

Santelisa Vale was in serious debt due to the worldwide financial crisis; those debts were acquired by LDC Brasil, which also contributed about $450 million. LDC Brasil will own 60% of LDC-SEV Bioenergia, while Santelisa Vale's owner will hold 18% of the shares; the remainder will be owned by private investors and two banks. LDC-SEV Bioenergia will have an initial public offering to partly finance expansion projects.

The company will operate 13 plants in Brazil that produce sugar, ethanol and electric power out of sugarcane processing, eight of which come from LDC Brasil and five from Santelisa Vale. The sugarcane-processing capacity of the company will be approximately 40 million tons per year, surpassed only by Cosan (NYSE:CZZ) (Sao Paulo, Brazil), which is expected to crush 60 million tons in the 2009-10 campaign.

Louis Dreyfus Commodities Brasil SA is a subsidiary of the French privately owned conglomerate Louis Dreyfus SAS (Paris), which operates in different sectors, ranging from the production and trading of agricultural commodities to real estate and oil- and gas-related activities.

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