On August 10, 2021, Raízen Energia S.A., a wholly owned subsidiary of Brazilian energy company Raízen S.A., entered into a share purchase agreement to acquire 50% of the shares of Barcos y Rodados S.A. (“B&R”), a company organized under the laws of Paraguay, from the Ortega Echeverria family group. B&R is a leading player in the Paraguayan fuel distribution market, with a network of 350 fuel retail stations. The total transaction price amounts to USD 130 million, of which USD 40 million will be paid at the closing and USD 90 million will be paid in five annual instalments. The price is subject to customary pre- and post-closing adjustments. Closing of the transaction is subject to fulfilment of customary conditions precedent, including the segregation and inclusion of certain assets of B&R.
As part of the transaction, Raízen will sublicense to B&R its right to use the Shell brand, and B&R will progressively convert its fuel stations to Shell brand. In addition, on the closing, Raízen and the other shareholders will enter into a shareholders’ agreement, which will govern their rights and obligations as shareholders of B&R, and several other ancillary agreements. Under the SHA, Raízen will have the right to appoint all of B&R’s senior management and a majority of the members of B&R’s board of directors. Raízen will also be entitled to preferred dividends based on B&R’s financial performance.
The transaction is yet another example of Mitrani Caballero’s cross-border capabilities, as they acted as international counsel to Raízen in a significant transaction with little or no contact with Argentina, building upon the relationship that they had established with Raízen during their representation of them on the acquisition of Shell’s Argentine downstream assets in 2018. The acquisition marks one step further in Raízen’s continuing expansion into other markets and follows its recent IPO in Brazil.