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Exclusive: Raízen nears buying Shell's Argentina gas station chain - sources
August 24, 2017 / 2:10 PM / a month ago

Exclusive: Raízen nears buying Shell's Argentina gas station chain - sources

FILE PHOTO: A logo for Shell is seen on a garage forecourt in central London, Britain, March 6, 2014. REUTERS/Neil Hall/File Photo

(this story corrects name of bidder to Raízen Combustíveis SA, not Raizen Energia SA, throughout story.)

By Tatiana Bautzer and Guillermo Parra-Bernal

SAO PAULO (Reuters) - Brazil’s Raízen Combustíveis SA is close to buying parent Royal Dutch Shell Plc’s Argentina gas station network for more than $1 billion, two people familiar with the plan said.

Raízen’s non-binding bid topped rival offers by Argentine oil company YPF SA (YPFD.BA), Chile’s Quinenco SA QNN.SN and China National Petroleum Corp’s Petrochina Co Ltd (601857.SS), two of the sources said. The four companies participated in a competitive auction process overseen by Credit Suisse Group AG (CSGN.S), they said.

Raízen, whose parent controls Brazil’s No. 2 chain of gasoline stations, has been exploring financing alternatives for the deal with banks or in international bond markets, one source said. Shell (RDSa.L) and Brazil’s Cosan SA Industria & Comércio (CSAN3.SA) each own 50 percent of the 6-year-old joint venture.

In a statement, Shell said it would not comment on potential deals. Raízen Combustíveis also declined to comment.

Interest in Argentine assets has increased since President Mauricio Macri’s business-friendly administration took office in December 2015. The value of announced mergers in Latin America’s third-largest economy totals $10.847 billion so far this year, 15 times the level of the same period in 2015, Thomson Reuters deals intelligence data showed.

Shell, which has 630 Argentine gas stations, put the unit up for sale earlier this year as part of a $30 billion divestiture program to cut debt following last year’s acquisition of BG Group Plc.

In Brazil, Raízen Combustíveis’s network uses the Shell brand. According to the sources, parent Raízen Energia SA Chief Executive Officer Luis Henrique Guimarães has personally engaged in the acquisition talks.

Common shares of Raízen partner Cosan rose 0.5 percent to 37.88 reais on Thursday trading in Sao Paulo, extending gains over the last month to 5.3 percent. Raízen is not listed.

Royal Dutch Shell shares rose 0.3 percent in London.

In 2011, Quinenco, a conglomerate controlled by Chilean Luksic family, bought Shell’s fuel distribution business in Chile. Quinenco’s Empresa Nacional de Energia Enex SA also uses the Shell brand across the country.

Reporting by Tatiana Bautzer and Guillermo Parra-Bernal; Additional reporting by Jessica Resnick-Ault in New York, Juliana Castilla in Buenos Aires; Editing by Lisa Von Ahn

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