Cosan described its 5.7% overall stake as a "long-term investment" which will enable it to expand its operations. The company is also planning to invest Reais 1.3bn in its own railway by 2014 as it attempts to increase transport of ethanol and sugar by rail from 10% in 2011 to more than 50% this year.
Cosan agreed to buy ALL shares from some of the company's leading shareholders, Mr Riccardo Arduini, Mrs Julia Dora Koranyi Arduini and investment fund Global Market Investments (GMI), rather than on the open market.
Cosan's chief executive, Mr Marcos Lutz, explained that the company paid such a high premium in order to have a say in the day-to-day operations of ALL. "The idea is not to control this company but to have a strategic position big enough to participate in the decisions," Lutz says.
ALL 21,000km railway links the major agricultural regions in southern Brazil and northern Argentina with the key ports of Santos, Paranagua, and Buenos Aires.