América Latina Logística SA , Brazil’s largest railroad operator, and logistics company Rumo Logística have decided on broad terms of a merger expected to be signed as soon as next week, newspaper Valor Economico reported.
ALL would have 60 percent to 65 percent of the new company while Rumo, controlled by sugar and ethanol producer Cosan SA Industria e Comercio, would own 35 percent to 40 percent, Valor reported, without naming its sources.
The new company would be controlled through a shareholder agreement in which only Cosan, state development bank BNDES and two investment funds with a minority stake in Rumo would take part, Valor said. Details on the deal were still pending, the newspaper added.
ALL said in a securities filing that the deal had not yet been finalized.
“Although the negotiations have advanced in recent days, there is not at this time a signed agreement, proposal or any other document, binding or not, between the parties,” it said in the filing.
Rumo’s parent company, Cosan did not immediately respond to calls seeking comment.
Brazil’s government has encouraged the merger as it seeks to boost investments in the country’s dilapidated rail network. BNDES would own about 8 percent of the new company, Valor said.
The deal between the two companies would settle a commercial dispute over the transportation of sugar. ALL and Cosan have had inconclusive talks about a tie-up in the past. (Reuters)