SAO PAULO, June 12 (Reuters) - Brazil’s second-biggest fuel distributor, the Ipiranga unit of Ultrapar Participações SA , agreed to acquire a smaller peer for 2.17 billion reais ($635 million), rivaling the reach of state oil company Petrobras’ distribution unit.
Ipiranga, which has a network of 7,241 service stations, said in a securities filing on Sunday that the acquisition of Alesat Combustíveis SA, or ALE, the country’s fourth-biggest distributor with about 2,000 gas stations, would help it expand in northeast Brazil.
Petrobras Distribuidora, the distribution and sales arm of state oil giant Petroleo Brasileiro SA, or Petrobras, has about 7,500 service stations, according to its website.
Ipiranga’s cash payment to ALE will deduct the smaller rival’s net debt, equal to 737 million reais in December, and is subject to adjustments based on working capital and net debt when the deal closes, according to the securities filing.
Petrobras has said it wants to sell at least 25 percent of its distribution unit to a “strategic partner” as part of a plan to sell $15.1 billion of assets to pay down debt.
Last year ALE sold 4.3 million cubic meters of diesel, gasoline, ethanol and natural gas, booking revenue of 11.4 billion reais and earnings before interest, taxes, depreciation and amortization of 275 million reais, according to the filing.
$1 = 3.42 Brazilian reais Reporting by Priscila Jordao and Brad Haynes; Editing by Nick Zieminski