FEMSA Comercio, the retail arm of Mexican beverage retailer and bottler Fomento Economico Mexicano SAB de CV, will take a 50% stake in Raízen Combustíveis SA to enter the convenience store sector in Brazil.
Raízen is a 50-50 joint venture between Cosan Ltd. and Shell Brazil Holding BV. It operates around 6,200 Shell gasoline stations in the country, and approximately 1,000 of these locations have a Select convenience store.
FEMSA Comercio will acquire the 50% equity interest stake in Raízen for 561 million Brazilian reais. The 50-50 joint venture between the parties will potentially see increasing penetration of Select convenience stores at Raízen service stations and possible stand-alone stores under FEMSA's Oxxo banner.
"We have been looking at Brazil as a compelling market for small-format retail for a long time. The transaction announced today combines the right asset and the right partner for us, with the right structure and the right timing," FEMSA Comercio CEO Daniel Rodriguez said in a statement.
The joint venture is limited to the convenience store business and excludes the fuel service station operations, according to the release.
The transaction is expected to close in the second half of the year, subject to customary regulatory approvals.
As of August 7, US$1 was equivalent to 3.98 Brazilian reais.