TEXT-S&P: Cosan subsidiary to merge with Camil Alimentos
May 30 - Standard & Poor's Ratings Services said today that its ratings on Cosan S.A. Industria e Comercio and its controlling holding company Cosan Ltd. (jointly Cosan; BB/Stable/--) are not affected by the planned merger of its subsidiary Docelar Alimentos e Bebidas S.A., holder of the Uniao and Da Barra sugar brands, with Camil Alimentos S.A. (global scale: BB-/Positive/-- national scale: brA+/Positive/--). Cosan will receive R$345 million in cash in up to three years after the closing of the merger, which the company will use to acquire stakes in America Latina Logistica (not rated) and Companhia de Gas de Sao Paulo (not rated). Following Camil's merger with Docelar, Cosan will have a stake of 11.72% in Camil, and potentially benefit from dividends of a stronger branded food company. The merger is subject to some conditions and regulatory approval and will probably take some time to be concluded. We don't expect significant changes in Cosan's business and financial profiles, which we currently assess as fair and significant, respectively. As recent M&A have indicated, we expect Cosan to have a stronger focus on energy and infrastructure segments. The divestment of Docelar is in line with this strategy and allows Cosan to maintain a stake in the branded food business. There is no material change in the company's debt profile and a slight improvement in liquidity with the cash payment of the transaction, which will be used to help fund announced acquisitions.
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