Shell Argentina signed an agreement for the sale of its 645 service stations to Brazil-based Raízen for US$950m, subject to "normal conditions of closure," Shell said in a press release.
The operation includes, in addition to the outlets, the company's Buenos Aires refinery and its marine fuel, aviation fuel, asphalt, chemical and lubricant businesses, as well as its supply and distribution activities in the country.
Shell's upstream activities in the Vaca Muerta formation will not be included in the transaction, where the company "sees substantial long-term growth potential in Argentina's shale resources."
Raízen is a joint venture established in 2011 between Shell (50%) and Cosan (50%), a sugar, ethanol and bioenergy producer from Brazil, with 860,000 cultivated hectares, a network of more than 6,000 Shell service stations and 950 Shell Select stores.
The firm has plans to develop logistical, marketing and financing synergies between Brazilian and Argentine operations. Shell's 20% market share in Argentina was crucial for the buying decision, Raízen said in a press release.
"We see Argentina in a good moment, with good perspectives for this segment, and we want to grow and create value together, bringing new long term opportunities," said Raízen CEO Luiz Henrique Guimarães.
Raízen will continue its relationship with Shell through several commercial agreements worth an estimated US$300mn.
"We plan to continue thriving in Argentina's downstream market through Raízen," said John Abbott, global head of Shell Downstream. "Raízen," he added, "has already delivered significant value for us in Brazil and we will remain an important fuel supplier to Argentina under this deal."
Through a brand license agreement, Raízen will continue to use the Shell brand, which will allow customers to "continue to enjoy access to high-quality, Shell-branded products and services," the company said in the release.