Petrobras bids for stake in ethanol firm: report

RIO DE JANEIRO (BestGrowthStock) – Brazilian state oil company Petrobras has made an offer of about 3 billion reais ($1.76 billion) to buy 40 percent of ethanol producer ETH in an effort to become the leading player in the biofuels sector, a newspaper reported on Saturday.

Petrobras’ biofuels arm, Petrobras Biocombustivel, said in a statement that it was not in talks with ETH, a unit of infrastructure firm Odebrecht.

Folha de Sao Paulo newspaper reported that the purchase of a stake in ETH was part of Petrobras’ plan to overtake Brazil’s Cosan as the world’s largest ethanol producer in coming years.

ETH declined to comment on the report, Folha said.

Brazil’s sugar and ethanol industry has seen a flurry of mergers and acquisitions, luring investors as more countries mix the biofuel into gasoline and as more flex-fuel cars take to the road in Brazil, running solely on ethanol.

In February, Royal Dutch Shell Plc announced the biggest-ever foray into biofuels by a major oil company, striking a deal with Cosan to create a $21 billion-a-year joint venture.

($=1.7 reais)

(Reporting by Stuart Grudgings, editing by Vicki Allen)

Petrobras bids for stake in ethanol firm: report