Shareholders of Brasil Ecodiesel Industria & Comercio de Biocombustiveis & Oleos Vegetais SA, a biodiesel maker without an adequate supply of feedstock, approved the acquisition of closely held agriculture company Vanguarda do Brasil SA to create a 1.79 billion-real ($1.08 billion) biofuels producer.
Brasil Ecodiesel will trade 1.1 billion reais worth of its shares for all of Vanguarda’s, said Marcelo Passaglia Paracchini, chief executive officer of Veremonte Participacoes SA, the investment company that owns 40 percent of Vanguarda.
The approval was announced in a regulatory filing yesterday and lets Enrique Banuelos, who owns Veremonte, form one of Brazil’s biggest agribusiness companies by repeating the strategy he used in home-building.
The world’s 655th richest man in 2010 according to Forbes, Banuelos is best-known in Brazil for merging three real-estate companies to create the nation’s biggest homebuilder, said Paracchini.
“We’re bringing our financial and strategic skills that we used in real estate and bringing it to this unconsolidated sector,” Paracchini said yesterday in an interview.
Brasil Ecodiesel will likely pursue additional deals. “We want to use our shares as a magnet so other companies exchange their shares with ours, making us a bigger player” he said, and another acquisition might be announced within two months.
The shareholder approval comes more than four months after Banuelos proposed combining Pinheiros, Brazil-based Brasil Ecodiesel and Vanguarda. The sale is expected to close Thursday and Banuelos will own 21 percent of the new company, he said.
Brasil Ecodiesel operates six refineries, and Vanguarda owns 230,000 hectares (568,300 acres) of mainly soy, corn and cotton plantations in the states of Mato Grosso and Bahia, according to Paracchini.
‘Agribusiness Champion’
“We want to make a national champion of agribusiness” that can “compete with the likes of Cargill Inc., Bunge Ltd. (BG) and Archer Daniels Midland Co.,” Paracchini said.
Brasil Ecodiesel acquired another agriculture company last year, Maeda SA Agroindustrial. Vanguarda is Maeda but “bigger and better,” with more than twice the soy and cotton fields, and includes 150 harvesters and 13 airplanes for dispersing seeds and pesticides, Paracchini said.
Brasil Ecodiesel rose 4.9 percent to 64 centavos in Sao Paulo trading yesterday, valuing it at 694 million reais.
Rejected Deal
Brasil Ecodiesel’s board initially rejected the proposed merger because a director opposed the plan. Shareholders approved in July a new board that approved the deal.
Enrique Banuelos was the world’s 95th richest man in 2007 with a net worth of $7.7 billion according to Forbes, before losing $6.4 billion when falling property prices in Spain drove down the value of his real estate company Astroc Mediterraneo SA by more than 90 percent.
He entered Brazil’s real-estate market by buying stakes in Abyara Planejamento Imobiliario SA, Agra Empreendimentos Imobiliarios SA and Klabin Segall SA in 2008 and 2009, then merged them and sold the combined company to PDG Realty SA Empreendimentos & Participacoes, according to Osmar Cesar Camilo, an analyst at the Sao Paulo-based brokerage Sociedade Corretora Paulista SA, said in an interview.
“He’s trying to do the same thing with agriculture,” Camilo said in an interview.
©2011 BLOOMBERG L.P.
