ALL Rallies on Report Deal With Cosan Is Near: Sao Paulo Mover

ALL-America Latina Logistica SA (ALLL3), Brazil’s largest railroad operator, jumped the most since 2008 as Valor Economico reported that it was close to an agreement to merge with Cosan SA Industria & Comercio’s Rumo Logistica SA.

A deal ending a dispute over sugar transportation contracts may be concluded next week, Valor Economico reported, without saying where it got the information. Curitiba, Brazil-based ALL and Cosan said in separate regulatory filings today that while talks have advanced in the past few days, there is no agreement yet.

ALL surged 17 percent to 6.33 reais at 11:29 a.m. in Sao Paulo, the best performance on the Ibovespa (IBOV), which gained 0.2 percent. Cosan, which runs the world’s largest sugar-cane processor in a joint venture with Royal Dutch Shell Plc, increased 6.1 percent to 36.87 reais in the second-biggest gain on the benchmark stock index.

Sao Paulo-based Cosan, which signed a partnership with ALL in 2009, abandoned in August a plan to buy a 5.67 percent stake in the company, saying negotiations “ended without the transaction coming to fruition.”

While Cosan’s Rumo has said it delivered on a pledge to invest about 1 billion reais ($418 million) to increase rail capacity in the partnership to carry sugar to Brazil’s Santos Port, it argues that ALL didn’t give its cargo priority as agreed. ALL is suing to terminate the contract, saying Cosan hasn’t completed a terminal upgrade needed to avoid logjams upon the sugar’s arrival by train.

To contact the reporter on this story: Julia Leite in New York at jleite3@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net

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