August 2, 2017 / 10:06 PM / a year ago

Brazil's Alesat ponders ways to fund expansion after takeover blocked-CEO

SAO PAULO, Aug 2 (Reuters) - Alesat Combustíveis SA, a Brazilian fuel distribution company whose takeover was blocked by antitrust regulators on Wednesday, is pondering how best to accelerate domestic expansion, including bringing in a partner to help close the gap with lager rivals, its chief executive officer said.

CEO and shareholder Marcelo Alecrim said in an interview on Wednesday that watchdog Cade’s decision to reject Alesat’s takeover by Ultrapar Participações SA “took me by surprise.” The decision practically “kills the idea” of tying up Alesat with any of Brazil’s top-three gas station chains, he added.

Alecrim said that, years prior to Alesat shareholders’ acceptance of Ultrapar’s 2.17 billion-real ($696 million) bid, the company held talks with France’s Total SA and Bunge Ltd - which has domestic biofuels operations. Alesat, which is equally controlled by Alecrim and investment holding company Asamar SA, accepted Ultrapar’s bid over a year ago.

“We may discuss partnerships, but that is not a priority now,” Alecrim said. The company has 12.5 billion reais in annual revenue and may consider issuing debt in local markets to fund expansion, he added.

The failed deal underscores how Brazilian authorities have turned tougher with deals that could give large conglomerates extra market power. On June 28, the majority of Cade’s board rejected Kroton Educacional SA’s purchase of smaller rival Estácio Participações SA, a deal that would have created the world’s No. 1 for-profit education firm. (Reporting by Tatiana Bautzer and Alberto Alerigi Jr.; Writing by Guillermo Parra-Bernal; Editing by James Dalgleish)

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