Brazil's Cosan to take full control of America Latina Logistica in $3-bn stock deal

Cosan SA, Brazil's largest and the world's fifth-largest producer of ethanol, yesterday said that it would take full control of Latin America's largest railroad company America Latina Logistica SA (ALL) in a 6.96 billion reais ($3 billion) all-stock deal.

Cosan is offering to swap its logistics unit Rumo Logistica SA with ALL in a transaction that values each ALL share at 10.184 reais, a 56 per cent premium to ALL's Friday closing price.

Under the terms of the deal, a new logistical company will be created and shareholders of ALL would own most of the capital of the combined entity, while Cosan would hold a majority of board seats.

The new company would have a market value of 10.96 billion reais ($4.7 billion), and ALL shareholders would hold 63.5 per cent and Rumo shareholders will hold 36.5 per cent.

Post closing, the new company will merge ALL's assets into Rumo Logistica, which provides transportation, storage and product shipment services.

The new company will be spun off into a separate listed company at 10.184 reais per share.

Founded in 1997 and based in Curitiba, ALL operates a fleet of 1,060 locomotives and 31,000 rail cars on 21,300km of tracks between Argentina and the southern Brazilian states of São Paulo, Mato Grosso del Sur, Paraná, Santa Catarina, and Rio Grande do Sul.

It provides logistics services, transportation services terminal and storages, and handles bulk and manufactured goods.

Cosan, the $10.2 billion Brazilian conglomerate, is a producer of bioethonal, sugar, and energy. It jointly controls the world's largest sugar-cane processor with Royal Dutch Shell.