ALL agrees to merger

BRAZIL: On April 15 América Latina Logística SA announced that its board had accepted a proposal to combine its activities with those of Rumo Logística Operadora Multimodal SA, a subsidiary of energy and logistics group Cosan. The proposal made by Rumo on February 24 values ALL at R$6·96bn, equivalent to R$10·18 per share.

ALL shareholders would hold 63·5% of the new company and Rumo shareholders 36·5%, while Cosan would appoint the majority of the directors on the board of the combined company. According to Cosan, the merger will capture synergies and enable the best use to be made of the rail and port assets of both companies, as well as unlocking investment to make better use of the ALL rail network.

The proposal is now to be considered by an extraordinary meeting of ALL shareholders, to be convened within 30 days. Rumo shareholders will also vote on the merger, which would require regulatory approval from competition authority CADE and national transport agency ANTT, 'as well as other public agencies whose prior authorisations are needed'.

ALL's rail operations are currently organised as four subsidiaries providing freight services on the North, West and South networks, as well as the Paulista network in the state of São Paulo. According to provisional data, a total of 10·04 billion tonne-km were carried in the first quarter of 2014 when ALL rail operations reported an adjusted EBITDA of R$425·7m.