Argentina: Divestment Programme Shell to Sell its Argentinian Downstream Business to Raízen
Shell has sold its Downstream business in Argentina to Raízen for $ 0.95 billion in cash. The sale includes the Buenos Aires Refinery, around 645 retail stations, liquefied petroleum gas, marine fuels, aviation fuels, bitumen, chemicals and lubricants businesses, as well as supply and distribution activities in the country.
Den Haag/The Netherlands — The transaction proceeds at completion and is subject to customary closing conditions. After the transaction closes, the businesses acquired by Raízen will continue their relationships with Shell through various commercial agreements, which represent an estimated value of $ 0.3 billion.
Raízen, a joint venture set up in 2011 between Shell and Cosan, is a leading biofuels producer and fuels distributor in Brazil, where it already manages more than 6,000 Shell service stations.
John Abbott, Shell Downstream Director, said that his company plans to continue thriving in Argentina’s downstream market through Raízen and that the Dutch group would remain an important fuel supplier to Argentina under this deal. Shell has been in Argentina for more than 100 years. Through a licensing agreement with Raízen, the Shell brand will remain prominent in the country.
The agreement is part of the company's $ 30 billion divestment programme. It follows a strategic review of the Downstream business in Argentina that began in August 2016. The agreement with the JV is the result of a competitive bidding process and the sale is expected to complete later this year. In a statement the group announced that this would offer the opportunity to consolidate a regional partnership between Shell and Cosan. The sale does not include the company’s Upstream interests in the Vaca Muerta shale formation. Shell sees substantial long-term growth potential in Argentina’s shale resources, the statement said.