MercoPress. South Atlantic News Agency

Merger in Brazil creates market leader in sugar, rice and canned fish

Camil has strong interests in Chile and particularly in Uruguay with Saman

Brazilian sugar and ethanol producer Cosan and the country's largest rice producer, Camil Alimentos, reached an agreement to merge their food divisions, Cosan said in a statement this week.

As part of the deal, Cosan said it will receive 345 million Brazilian Reais (174 million US dollars)--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 and controls 75% of the domestic market, while Camil is the local largest rice producer.

Last year, Gavea Investimentos, which is controlled by JPMorgan Chase & Co. and headed by former Brazilian Central Bank President Arminio Fraga, bought a 31.75% stake in Camil Alimentos,

Camil which has the capacity to process 18.6 million tons of grains annually last year acquired from multinational Pepsico the brand Coqueiro famous in Brazil for its canned fish.

Camil is also strong regionally having acquired in 2007 Uruguay’s main rice mill, Saman which controls 50% of the country’s domestic market and exports almost 90% of its production. In 2009 Camil took over Tucapel in Chile which leads in production and market share. This means the company now has 12 rice processing plants in Brazil; 9 in Uruguay and four in Chile.

Following the acquisition of Uruguay’s Saman, Camil became the main rice exporter of Latin America.

”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.

Cosan has an annual turnover of 12.4bn dollars with net profits last year of 438 million, and the group employs 45.000.

The merger still must be approved by Brazilian antitrust agency CADE