BP acquires Brazil biofuels group for £421m

BP has moved to improve its green credentials with the purchase of Brazilian ethanol and sugar producer Companhia Nacional de Açúcar e Álcool (CNAA) for $680m (£421m).The acquisition is the oil giant's biggest ever in the alternative energy sector.BP, whose reputation for environmental friendliness was battered last year when the Deepwater Horizon well in the Gulf of Mexico exploded, killing 11 workers and resulting in a huge oil spill, will add CNAA to its existing Brazilian biofuels business. Once's CNAA's assets are fully developed, BP's overall production capacity in Brazil should reach around 9m barrels of ethanol equivalent a year.Under the terms of the deal it will take on 83% of CNAA's shares and 100% of its existing debt. Following the acquisition it will become the operator of two ethanol mills, in Goiás and Minas Gerais states. CNAA is developing a third mill in Minas Gerais."Low carbon energy will play an increasingly significant role in meeting world energy demand. BP is committed to producing biofuels to help meet this demand," said BP's chairman Carl-Henric Svanberg. "Today's transaction also fits BP's strategy of increasing our exposure to growing energy markets."