Brazil's Petrobras says to buy Suzano petrochem firm
Fri Aug 3, 2007 6:04PM EDT
SAO PAULO, Aug 3 (Reuters) - Brazilian state oil company Petrobras said on Friday it had agreed to buy control of Suzano Petroquimica for 2.1 billion reais ($1.1 billion) in the second major Brazilian petrochemicals deal this year.
The deal, announced at a news conference by Petrobras Chief Executive Jose Sergio Gabrielli, gives Petrobras all shares held, directly and indirectly, by the controlling shareholders of Suzano Petroquimica.
Petrobras said it would hold a tender offer to buy up to 600 million reais ($310 million) worth of shares from minority shareholders, lifting the total value of the acquisition to 2.7 billion reais.
Petrobras agreed to pay about 13.44 reais per voting share and 10.70 reais per non-voting share.
The Brazilian company has been strengthening its position in petrochemicals in the past few years, a strategy some analysts see as part of a widely expected consolidation process.
Some critics, however, said that Petrobras' expansion into petrochemicals is tantamount to the state regaining control of the sector.
"It's a surprise, it shows a strong renationalization ... Petrobras has said it wanted a strong position in the petrochemical sector, but not as a controller," said Luiz Otavio Broad, an analyst at Agora brokerage.
In March, Petrobras and two partners, Latin America's largest petrochemical company Braskem and Ultrapar Participacoes, bought petrochemical and fuel company Ipiranga for $4 billion.
Brazil's anti-trust watchdog is still analyzing the deal and some limitations have been imposed.
Banco do Brasil analyst Nelson Matos said the new acquisition was "another step toward consolidation" in a market with many players and not enough scale for investment.
"The sector gains scale and leverage now with a strong player," he said, adding that the deal would bring together several important petrochemical assets in southeastern Brazil.
Analysts were divided on whether the price was fair and if the deal would be good for Petrobras. Petrobras shares fell 4.3 percent in late afternoon, underperforming the market, which was down 3.4 percent.
Trading in Suzano shares had been suspended in the afternoon pending the statement. The shares soared 56 percent to 8.91 reais after trading resumed near the end of the session. ($1 = 1.902 reais)
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