TEXT-S&P: Cosan subsidiary to merge with Camil Alimentos

Wed May 30, 2012 10:34am EDT

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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