Biodiesel refiner Brasil Ecodiesel approves purchase of agricultural company Vanguarda to create 1.79B-reais company; Brazil Ecodiesel expects to pursue other deals, could announce another acquisition within two months, says top executive
September 9, 2011
– Shareholders of Brasil Ecodiesel Industria & Comercio de Biocombustiveis & Oleos Vegetais SA has approved the acquisition of agricultural company Vanguarda do Brasil SA, according to a regulatory filing yesterday, reported Bloomberg News on Sept. 7.
The sale, which is expected to close on Thursday, will create a 1.79 billion-reais (US$1.08 billion) biofuels producer and give biodiesel maker Brasil Ecodiesel access to the feedstock it needs. The new entity will be one of Brazil’s biggest agribusiness companies.
Brasil Ecodiesel will likely look for other acquisitions and might announce one within two months, said Marcelo Passaglia Paracchini, CEO of Veremonte Participacoes SA, the investment firm that owns 40% of Vanguarda, Bloomberg reported.
In the deal, Brasil Ecodiesel will swap 1.1 billion reais worth of its shares for all of Vanguarda’s, said Paracchini. He said Veremonte would bring the skills it used in consolidating Brazil’s real estate market to the unconsolidated biofuels sector.
Enrique Banuelos, who owns Veremonte, will own 21% of the new company. He proposed combining Brasil Ecodiesel and Vanguarda four months ago, reported Bloomberg.
Banuelos is “trying to do the same thing with agriculture” as he did with real estate, said Osmar Cesar Camilo, an analyst at Sao Paulo-based brokerage Sociedade Corretora Paulista SA.
Pinheiros, Brazil-based Brasil Ecodiesel operates six refineries. Vanguarda has 230,000 hectares (568,000 acres) of plantations that grow mostly soy, corn and cotton in the states of Mato Grosso and Bahia, said Paracchini, Bloomberg reported.
Last year, Brasil Ecodiesel bought Maeda SA Agroindustrial, an agriculture company that is not as big as Vanguarda, which has twice the soy and cotton fields, 150 harvesters and 13 airplanes to disperse seeds and pesticides, he said.
Paracchini said that the plan is to make “a national champion of agribusiness” that is capable of competing with such companies as Cargill Inc., Bunge Ltd. and Archer Daniels Midland Co., reported Bloomberg.
The primary source of this article is Bloomberg News, New York, New York, on Sept. 7, 2011.