Brazil's Cosan the world's largest sugar and ethanol processor announced Friday it had agreed to buy more than 1.500 Brazilian service stations and other assets from Exxon Mobil (Esso Brazil) for 826 million US dollars.
Cosan thus becomes the fifth-largest fuels distributor in Brazil, with 7.2% of the market. Esso Brazil also provides aviation-fuel services and owns a lubricant plant in Rio de Janeiro and distribution terminals. Under the agreement Cosan can use the Esso brand name and also takes charge of a 163 million US dollars debt. "Placing Cosan in a relevant position in the fuel distribution sector is an important step towards consolidating ethanol as the main fuel in the Brazilian market, and the possibility of a faster and more precise market analysis is increasingly strategic," Cosan said in a statement. The rising demand in Brazil for the so-called flex-fuel cars, which run on any mixture of gasoline or ethanol, helped propel ethanol sales volumes in Brazil past gasoline in February, Cosan said, citing the National Petroleum Agency. "Between 2003 and 2007 ethanol consumption in Brazil increased 30.2% annually against gasoline's 2.8%", added Cosan which in 2007 had an turnover of 2.25 billion US dollars.. Exxon-Mobil has been divesting interests in South America and Cosan's takeover of Esso surprised the market because it was believed that Petrobras had the upper hand, since the Brazilian government managed company also was interested in the US corporation assets in Chile and Uruguay.