Brazil’s Cosan Buys 4.9% Stake in Vale, Seeks to Increase Share to 6.5%

São Paulo — Brazilian conglomerate Cosan (CSAN3) has announced it is buying a 4.9% stake in mining giant Vale (VALE3), via a direct equity and derivatives investment, and has signed a contract to increase its shareholding to 6.5%.

The deal represents one of the main strategic moves of the holding company owned by Rubens Ometto, which has a market value of about 34 billion reais ($6.53 billion) on Brazil’s B3 stock exchange. Vale, in turn, is the second-most valuable company on the stock exchange, with a valuation of 360 billion reais ($69.1 billion), only behind Petrobras.

With the additional stake, which depends on approval from the antitrust watchdog CADE, Cosan’s investment could total more than 23 billion reais ($4.41 billion) at current values.

“The company also intends to increase its stake above the percentage already acquired, and will immediately seek [CADE’s] approval to do so,” Cosan said through a material fact statement.

“Until CADE’s ruling, the company will be exposed to an additional position of 1.6% of Vale’s capital stock, contracted through a derivatives transaction separate from the one used for the acquisition, which may be converted into a direct stake of Vale after CADE’s authorization,” the company added.

Minutes after the announcement of the deal, Vale’s shares rose more than 4%, while Cosan’s shares fell close to 4%. At around 3:20 pm Brasilia time, the variations were +1% and -7.68%, respectively.

Cosan is a producer of bioethanol, sugar and energy, and operates in Brazil, Argentina, Bolivia, Uruguay and Paraguay.

Cosan’s businesses include Raízen, one of the five largest companies in the country by revenue, the result of a joint venture with Shell in ethanol and bioenergy; Compass Gás e Energia, Moove, which produces lubricants, and Rumo, Latin America’s largest independent railroad logistics operator.

Cosan’s entry into the mining segment had originally been announced a little over a year ago, in August 2021, with the formation of a joint venture for iron ore exploration in the state of Pará as of 2025, and the purchase of a port terminal in São Luís, Maranhão, for 720 million reais.

The purchase of Vale’s stake is complementary to Rumo’s business.

Ometto, 72, is the controlling shareholder of Cosan, with 35.87%, and which is listed on the stock exchange, as well as Raízen and Rumo. He is one of Brazil’s richest people, with an estimated net worth of 14.5 billion reais ($2.78 billion), Forbes magazine said in September.