* BP buys out remaining shares in Tropical BioEnergia
* Oil major also ups stake in ethanol/sugar maker CNAA
* Two deals total around $96 million in cash
SAO PAULO, Sept 14 (Reuters) - BP said on Tuesday it has agreed to raise its share in Brazilian ethanol maker Tropical Energia S.A. to 100 percent by acquiring the remaining 50 percent from partners for about $71 million in cash.
The oil major has also agreed to buy an additional 3 percent share in Brazilian sugar and ethanol producer Companhia Nacional de Acucar e Alcool (CNAA) from LDC Bioenergia S.A., for around $25 million in cash.
BP, which entered the Brazilian ethanol sector in 2008, when it bought 50 percent of Tropical, owns three mills in the country.
The deals highlight big oil companies’ diversification into Brazil’s ethanol sector as countries all around the world reconsider their dependence on fossil fuels.
Although investments in new capacity in the sector have been curtailed over the past few years, companies in general are still optimistic about demand for the cane-based fuel in the long run both in the Brazilian market and abroad.
Tropical BioEnergia has a mill in the center-western state of Goias, whose cane crushing capacity should now be doubled to 5 million tonnes a year, BP said in a statement.
The company also said it plans to expand operations in the region, without providing further details.
“We have a major growth agenda for our biofuels business in Brazil. This transaction, with other recent acquisitions, gives us a strong platform from which to expand our capacity to supply both domestic and international fuels markets,” said the head of BP Biofuels in Brazil, Mario Lindenhayn.
BP’s joint venture partners at Tropical were agribusiness group Maeda S.A. Agroindustrial, with 25 percent, and LDC-SEV, with the remaining 25 percent. The company will also refinance Tropical’s existing debt.
The share increase in CNAA follows the acquisition earlier this year of a stake in the company and subsequent conversion of CNAA’s long-term debt to equity.
The shares were bought from French commodities group Louis Dreyfus. The oil company will own 99.97 per cent of CNAA, with the remaining shares in hands of minority private shareholders, it said in the statement.