Brazilian sugar and ethanol producer Sao Martinho said it bought a 32 percent stake in cane mill Santa Cruz Acucar and an 18 percent stake in its agricultural management company Agropequaria Boa Vista for a combined 187.4 million reais ($110 million).
This is that latest in a long series of mergers and acquisitions that has swept through Brazil\’s cane industry since the financial crisis in 2008 weakened many over-leveraged mills to the point that they became soft takeover targets for deep-pocketed milling groups like Sao Martinho.
The payment will be made in three installments, according to a market filing published on Monday. The Santa Cruz stake cost 55.5 million reais and the Boa Vista stake 131.9 million reais. Sao Martinho said the stakes it acquired in the two companies were picked up after minority stakeholders indicated a desire to sell.
Sao Martinho said the mill is located sufficiently close to its own operations to offer important synergies in the combined group\’s operations.
Santa Cruz has the capacity to crush 4 million tonnes of cane a year and produces 60 percent sugar and 40 percent ethanol from its crush.