BP PLC (LSE:BP.) has agreed to acquire agri-giant Bunge's 50% stake in their Brazilian sugar and ethanol joint venture, BP Bunge Bioenergia, for $1.4 billion.
In doing so, the UK oil major will take control of a business producing around 50,000 barrels of ethanol equivalent per day from sugar cane.
The deal, expected to close by the end of 2024, will also see BP consolidate Bioenergia's $1.2 billion in debt and lease obligations, meaning BP will effectively pay Bunge $800 million.
The acquisition aligns with BP's strategy to meet the increasing demand for low-carbon biofuels.
Emma Delaney, BP’s head of customers and products, said: “Focusing our plans to develop new biofuels projects is also driven by value.
"Taken together, these changes can enable us to deliver the growth and returns we expect from biofuels, but in a simpler, more focused way.
"This is fully in line with BP’s priorities of driving focus into the business and growing shareholder returns.“