ALL already has a contract to provide transport services to Rumo, but the two companies have been embroiled in a legal dispute over contracts since the end of last year. Rumo argues that ALL has failed to invest in the additional capacity required on its network to accommodate the increasing volumes of sugar Cosan is dispatching to Brazil's ports.
The two companies have not disclosed what their new trading name will be.
The contract includes a commitment to complete track-doubling on the line between Itirapina and the port of Santos in São Paulo state, the construction of new terminal facilities, and the acquisition of 50 locomotives and 929 wagons.
ALL plans to invest Reais 20bn ($US 8.6bn) in its network by 2020, and nearly Reais 11bn of this will be spent over the next four years. Key projects will include the elimination of bottlenecks on the lines from Campinas to Estrela D'Oeste and Santos.