Shell and Cosan Form Joint Venture Raízen

Shell and Cosan established a joint venture named Raízen, which operates on a 50:50 basis. This partnership integrates Cosan's extensive operations in Brazilian ethanol production, energy generation, fuel distribution, and sugar activities with Shell's retail fuel and aviation distribution businesses in Brazil. The formation of Raízen marked a strategic move to enhance operational efficiencies and expand market presence in the renewable energy sector, particularly in biofuels, which are increasingly important in the context of global energy transition. The joint venture aimed to leverage the strengths of both companies, combining Shell's global expertise in energy with Cosan's local knowledge and established infrastructure in Brazil. In conjunction with the formation of Raízen, Shell undertook a significant asset management strategy, which included the sale of certain assets to fund a substantial capital expenditure program. This program was valued at $28 billion, with Shell planning to raise $2 to $3 billion through the sale of its liquefied petroleum gas (LPG) business and other assets. The joint venture and the asset sales were part of Shell's broader strategy to optimize its portfolio and focus on high-growth areas, particularly in renewable energy and biofuels, which are critical for meeting future energy demands and sustainability goals. The establishment of Raízen has positioned both companies to capitalize on the growing demand for renewable energy sources in Brazil and beyond.