Petrobras to Buy Remaining 70% of Logum Logistica for About $110 Million

what happened

Petrobras has agreed to take over the 70% of Logum Logistica that it does not yet control, which would make it the company's only shareholder, Dow Jones Newswires reports. The stakes are held by Raizen Energia and Copersucar, with 30% each, and by Uniduto Logistica, which holds 10%. The price is 620 million reais, roughly $109.8 million, and will be paid in three parts: 300 million reais at closing, then 160 million reais one year later and another 160 million two years after the deal.

Logum is a privately held company based in Rio de Janeiro. Its pipeline stretches more than 1,000 kilometers, and its terminals take in ethanol from production sites across the country. Petrobras says the acquisition will let it benefit from the expanding ethanol market, especially the growth of corn-based ethanol output in Brazil's Center-West region.

why it matters

For Petrobras the sum is small relative to the size of its business, so the effect on its shares is likely to be limited. The deal matters as a step toward control of biofuel logistics, adding ethanol transport capacity to the oil company's supply chain.

market impact

Petrobras shares: small deal that adds ethanol logistics assets, with limited effect on earnings

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