Reuter's shares a good overview of the magnitude of the ethanol (sugar biofuels) industry in this article. Through a joint venture, Shell is leveraging its downstream capabilities of gas stations and jet fuel distribution. Their partner, Cosan, is publicly traded on the NYSE and is the worlds largest ethanol & sugar company.
While industry critics cite the increasing price of sugar as a resistance to ethanol's growth as a major fuel source, Shell is showing a huge commitment with this deal. The JV includes a call option at year 10!
For M&A in Brazil, especially private equity players, consolidation and the growing involvement of major players is a positive trend. Perhaps as these companies compete, they will divest non-core businesses (such as Cosan's port operation). Increased professional management and decreased family ownership is also encouraging.
