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Femsa and Raizen end their partnership in Brazil

They announced on Thursday that Brazil's Raizen, and Mexico's Femsa, have decided to end their partnership, established in 2019, through the joint venture Grupo NOS, which operates an extensive network of convenience shops across Brazil.

In response to operational challenges and high levels of debt, sugarcane processor Raizen has embarked on a divestment plan. The Brazilian company said that the agreement, which was described by both parties as amicable, did not include any cash considerations. Raizen will also receive 1,256 Shell Select convenience stores and Shell Cafe convenience shops.

Femsa will receive 611 Oxxo shops, a distribution centre located in the state of Sao Paulo, as well as Grupo Nos’ existing debt and cash. This decision is in line with Raizen’s strategy to simplify and recycle its portfolio, said the Brazilian firm. It's a joint venture of oil giant Shell and conglomerate Cosan.

In a separate announcement, Femsa confirmed that it will now control 100% Oxxo Brasil. This move signals to both firms the ability to concentrate on their respective strategies.

"We are committed to expanding and strengthening Oxxo on this dynamic market. Femsa continues to place Brazil at the forefront of its long-term growth strategies, according to Jose Antonio Fernandez Garza.

Oxxo stores, which are ubiquitous in Mexico, have become popular in Brazil in recent years. They are now found in many cities including Sao Paulo. Femsa predicted last year that Brazil would become a major global player.

As big as a market

The chain will be as big as Mexico in a few short years. (Reporting and Editing by Aida Pelaez-Fernandez, Nick Zieminski).

(source: Reuters)