SAO PAULO (Dow Jones)-Brazilian sugar and ethanol producer Cosan
(CZZ, CSAN3.BR) and the country's largest rice producer, Camil
Alimentos, reached an agreement to merge their food divisions,
Cosan said in a statement late Monday.
As part of the deal, Cosan said it will receive 345 million
Brazilian reais ($174 million)--to be paid in up to three
years--and will then hold 11.72% of Camil.
"With the association, Cosan becomes a partner of a leader in
(the) branded food business. The transaction put together strong
brands in their respective segments, creating a market leader in
sugar, rice and canned fish," Cosan said.
Cosan produces famous sugar brands in Brazil Uniao and Da Barra,
while Camil is the local largest rice producer.
Last year, Gavea Investimentos, which is controlled by JPMorgan
Chase & Co. (JPM) and headed by former Banco Central do Brasil
President Arminio Fraga, bought a 31.75% stake in Camil
Alimentos,
"The association represents another step by Camil in its
strategy of becoming one of the largest Latin American companies in
branded food. Cosan will have a seat the new entity board of
directors. The controlling shareholders of the company will be the
actual controlling shareholders of Camil, who have proven expertise
in its business segments," Cosan said.
The merger still must be approved by Brazilian antitrust agency
CADE.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-3544-7071;
rogerio.jelmayer@dowjones.com