Brazil's Cosan, Camil To Merger Food Operations
First Published Tuesday, 29th May 2012 11:21 am - © 2012 Dow Jones
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.