By Brazil Stock Guide – Petrobras (PETR4) is considering buying a corn ethanol producer in 2025. The move would mark the state-run company’s return to a fast-growing industry it exited in the mid-2010s after divesting assets.
The segment accounts for R$ 23 billion ($4.3 billion) in ongoing projects, with production concentrated in Brazil’s Midwest and parts of São Paulo state. Corn ethanol has emerged as a strong alternative to sugarcane in biofuel production and is gaining traction as a pillar of the energy transition.
In a statement, Petrobras said it is conducting business analyses in bioproducts, including ethanol supply chains. The company’s 2025-2029 business plan includes “investments preferably through minority strategic partnerships or shared control with relevant sector players.”
Reentry into a contested market
The potential acquisition comes as Petrobras seeks to regain presence in fuel distribution, lost after the privatization of BR Distribuidora — now Vibra (VBBR3) — under former President Jair Bolsonaro. Vibra’s market capitalization stood at R$ 27.9 billion ($5.2 billion) as of Sept. 5.
Speculation that Petrobras might buy a stake in Raízen (RAIZ4), controlled by Shell and Cosan, was denied by the company. Analysts also see limited chance of a deal with Vibra due to non-compete clauses valid until 2029.
Fuel market under strain
Meanwhile, major distributors like Raízen, Vibra, and Ipiranga control 61.3% of Brazil’s fuel market, according to the National Oil Agency (ANP). Yet they continue to lose ground to irregular competitors operating through fuel fraud, tax evasion, and adulteration schemes.
Last week, joint federal and state operations targeted schemes attributed to the country’s largest criminal group, the First Capital Command (PCC), which cost the sector billions. Industry players see these crackdowns as key to restoring competitiveness.
Outlook
Petrobras’ possible return to corn ethanol ties directly to its broader diversification and energy transition strategy. Analysts say its entry could heat up the market, spur consolidation, and intensify pressure on mid-sized competitors. A decision on the acquisition is expected in the coming months, shaping Brazil’s energy policy outlook.
(Source: Valor Econômico)
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