British oil giant BP has agreed to take control of Brazilian ethanol and sugar producer CNAA for €492m, as demand rises for alternative energy.
BP said it would acquire 83% of the shares of CNAA and refinance all of the company's long-term debt. It added that the deal would eventually increase BP's Brazilian ethanol production to about 1.4 billion litres a year.
'Low carbon energy will play an increasingly significant role in meeting world energy demand,' BP chairman Carl-Henric Svanberg said in a company statement announcing the deal.
He said BP was committed to producing biofuels to help meet this demand. 'Today's transaction also fits BP's strategy of increasing our exposure to growing energy markets,' he added.
Ethanol, made using sugar, is widely used in Brazil as a cheaper alternative to petrol. BP chief executive Bob Dudley said the Brazilian deal was the biggest acquisition to date for BP Alternative Energy.
