UPDATE 2-Arcadis says cooperating with police in Brazilian fraud probe
* Brazilian police visited offices as part of corruption probe
* Shares plunge, despite Arcadis's limited exposure to Brazil (Adds analyst explanation for share price fall)
AMSTERDAM Dec 14 (Reuters) - Dutch engineering firm Arcadis said on Monday it was cooperating with Brazilian police as part of an investigation into suspected misuse of funds at a $6.4 billion water management project in northern Brazil.
Arcadis, which has water management and mining industry contracts in Brazil, did not specify whether it may also be targeted in the investigation into the São Francisco project.
"We are also not clear on that," spokesman Joost Slooten said. The company acts as manager for the project in a 50/50 joint venture with Brazil's Concremat.
Arcadis's shares were down 19 percent at 17.01 euros at 1135 GMT, with investors apparently spooked by memories of the Brazilian corruption probes that have dogged marine engineer SBM Offshore for years, said ESN/SNS Securities Analyst Edwin Jong.
"The share reaction is overdone," he said. "Brazil is only 5 percent of Arcadis's business."
SBM Offshore, which paid a record $240 million to Dutch prosecutors to settle allegations of bribery, made 60 percent of its sales in the country.
Work to divert the São Francisco, Brazil's second-longest river, to the country's drought-prone northwest has been under way since 2006, and the estimated cost has nearly doubled. Continuación...