SAO PAULO/NEW YORK: Brazil's Raizen, the joint venture between Royal Dutch Shell Plc and Cosan SA, has reached an agreement to buy Biosev SA , the sugar unit controlled by Louis Dreyfus, in a cash and stock deal, the companies said on Monday.

Raizen said in a securities filling it will pay 3.6 billion reais ($670.34 million) to Biosev shareholders, which will also receive 3.5% of Raizen preferred shares, plus 1.49% of redeemable shares.

Biosev's debt of around 7.7 billion reais ($1.43 billion) was not included in the deal and will remain with its current shareholders. Biosev said it is in talks with banks to refinance debt of 4.13 billion reais expected to remain after Raizen's cash payment of 3.6 billion reais.

The deal boosts Raizen's credential as the world's largest sugar maker, and one of the largest ethanol producers. It will operate 35 mills in Brazil with a sugar cane crushing capacity of 105 million tonnes per year, or the equivalent of 17% of Brazil's center-south crop in 2019/20.

The agreement also includes an earn-out payment of up to 350 million reais to be made by Raizen to Biosev shareholders after the fifth anniversary of the closing date, that will depend on targets such as sugar and ethanol prices.