Raizen, Femsa terminate convenience store partnership in Brazil

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Brazil's Raizen BMFBOVESPA:RAIZ4 and Mexico's Femsa BMV:FEMSA/UB have decided to terminate their partnership established in 2019 through joint venture Grupo Nos, which operates a network of convenience stores across Brazil, they said on Thursday. The agreement comes as sugarcane processor Raizen, one of the world's largest sugar producers and a major fuel distributor, drives a broad divestment strategy in the face of operational challenges and high debt.As part of the deal, which the companies described as amicable and does not involve cash considerations, Raizen will receive 1,256 Shell Select and Shell Cafe convenience stores, the Brazilian firm said in a securities filing.Femsa, meanwhile, will get 611 Oxxo stores, a distribution center located in Sao Paulo state, and Grupo Nos' existing debt and cash, it added. "This decision is aligned with Raizen's strategy of recycling and simplifying its business portfolio," said the Brazilian company, a joint venture between conglomerate Cosan BMFBOVESPA:CSAN3 and London-listed oil major Shell LSE:SHEL. In a separate statement, Femsa confirmed it would now control 100% of Oxxo Brasil, signaling that the move will allow both firms to focus on their respective business strategies. "We remain fully committed to strengthening and expanding Oxxo in this dynamic market. Brazil continues to be a key focus in Femsa's long-term growth strategy," the company's retail head, Jose Antonio Fernandez Garza, said. Mexico's ubiquitous Oxxo stores have gained popularity in recent years in Brazil, multiplying quickly in cities such as Sao Paulo. Femsa said last year that Brazil could become as big a market for the chain as Mexico, if not bigger, within a few years.

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