Target Information

On August 29, 2025, Cocal announced the acquisition of Raízen's Rio Brilhante and Passa Tempo units, located in Mato Grosso do Sul. This strategic operation involves the incorporation of a production capacity of 6 million tons of sugarcane per harvest, pending approval from the Administrative Council for Economic Defense (CADE) and the fulfillment of contractual conditions.

With this acquisition, Cocal's production capacity will increase from 10.3 million to 16.3 million tons per harvest. This expansion will also boost the direct workforce from 5,300 to 7,700 employees, highlighting the strategic significance of the deal. It demonstrates Cocal’s commitment to enhancing productive efficiency, leveraging cutting-edge technology, and fostering employee development.

Industry Overview in Brazil

The bioenergy sector in Brazil has experienced substantial growth over the past few decades, evolving into a cornerstone of the country's renewable energy landscape. Brazil is one of the leading producers of bioethanol, stemming predominantly from sugarcane, which reflects the country's commitment to sustainable energy solutions. This sector not only contributes to energy production but also plays a pivotal role in reducing greenhouse gas emissions.

Brazil’s favorable climate and vast agricultural land make it an ideal location for sugarcane cultivation, allowing for increased production and innovation in biofuel technologies. Additionally, with government policies increasingly supporting renewable energy initiatives, bioenergy stands out as a vital industry, attracting both domestic and international investments.

The growing demand for renewable energy, both locally and globally, positions Brazil competitively within the bioenergy industry, paving the way for further advancements and investments. Cocal's expansion into Mato Grosso do Sul underscores the dynamic nature of this market as companies strive to align with sustainable energy practices.

Overall, the bioenergy landscape in Brazil is marked by robust growth, technological innovations, and a commitment to sustainability—factors that will likely propel the industry forward in the coming years.

Rationale Behind the Deal

The rationale behind Cocal's acquisition of the Raízen units lies in the strategic intent to ramp up production capacity and enhance operational efficiencies. By increasing its production to 16.3 million tons of sugarcane, Cocal is positioning itself for greater market competitiveness and improved economies of scale. This acquisition also signifies a commitment to meeting the growing demand for renewable energy, particularly bioethanol in Brazil.

Furthermore, the expansion of the workforce from 5,300 to 7,700 employees reflects Cocal’s intent to invest not just in production, but also in its human capital, thereby fostering a more skilled workforce that is able to drive innovation and sustainability within the sector.

Investor Information

Cocal has been operating in the bioenergy sector for 45 years and is a member of Copersucar, a unique and innovative business ecosystem that connects associated mills, strategic partners, and invested companies. This affiliation enhances Cocal's capabilities by providing access to a network of resources and expertise critical for growth and operational success.

As a recognized player in renewable energy production in Brazil, Cocal is driven by its commitment to decarbonizing the energy matrix and promoting regional development. The company’s long-standing experience is indicative of its ability to navigate market dynamics effectively and sustain its growth trajectory.

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From a strategic standpoint, Cocal’s acquisition of the Raízen units appears to be a promising investment. With the growing demand for biofuels and the shift towards renewable energy sources, increasing production capacity aligns well with current market trends. The foresight to expand operations not only enhances Cocal’s market share but also positions it favorably in an industry expected to flourish.

The anticipated increase in workforce also reflects a proactive approach to nurturing talent to meet operational needs, ensuring that Cocal remains at the forefront of technological advancements within the bioenergy sector. This investment embodies a strategic move to bolster productivity and efficiency while minimizing environmental impact.

Additionally, the partnership with Copersucar adds a layer of strategic value, providing Cocal with access to innovative resources and industry expertise that can amplify its competitive edge. Overall, this acquisition is likely to yield significant benefits for Cocal, reinforcing its role as a leader in the renewable energy sector in Brazil.

While there are inherent risks associated with any acquisition, Cocal's established reputation and strategic vision suggest that this venture could serve as a catalyst for future growth and sustainability in the bioenergy market.

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