SAO PAULO, Sept 21 - Canada's Brookfield Asset Management Inc is close to finalizing the purchase of Brazilian engineering conglomerate Odebrecht SA's stake in a water and sewage firm after due diligence procedures slowed the transaction for months, two people with direct knowledge of the matter said.
Brookfield has agreed to buy the 70 percent that Odebrecht SA has in the unit, known as Odebrecht Ambiental SA, according to the sources. The deal will value Odebrecht Ambiental at 5 billion reais ($1.5 billion), depending on final details and adjustments, the people added.
An announcement is due within weeks, the people said.
Brookfield had been in exclusive talks to buy Odebrecht Ambiental since May. The transaction was subject to stringent due diligence procedures over several contracts, according to a third person with knowledge of the situation.
Reuters reported on Aug. 17 that Brookfield had signed a preliminary accord to buy Odebrecht Ambiental. It was not immediately clear whether Brazilian worker compensation and retirement fund FI-FGTS would also sell the remaining 30 percent it has in Odebrecht Ambiental to Brookfield.
Odebrecht, Latin America's largest engineering firm, declined to comment, as did Brookfield. All the people requested anonymity due to the sensitivity of the matter.
For Salvador, Brazil-based Odebrecht, the unit's sale is key to raise cash after lenders cut access to credit following the group's involvement in Brazil's worst corruption probe ever. Many of Odebrecht SA's 15 subsidiaries are refinancing up to 35 billion reais in loans and selling assets. .
Fallout from the so-called "Operation Car Wash" probe has led potential buyers to step up legal scrutiny of some assets being sold by companies ensnared in the probe. The usual time for due diligence has doubled over the past year or so, especially for those assets, lawyers and bankers told Reuters in July.
$1 = 3.2431 Brazilian reais Editing by Christian Plumb