Compass to acquire Petrobras gas distributor for $400mn

Compass Gas, the natural gas subsidiary of Brazilian energy and logistics conglomerate Cosan, agreed to acquire a 51pc stake in gas distribution holding company Gaspetro from Brazilian state-controlled Petrobras for R2.03bn ($397mn).

Gaspetro owns stakes in 19 gas distribution companies. These control over 10,000km (6,200mi) of gas pipelines and distribute 29mn m3/d of gas per year.

The deal hinges on regulatory approval and needs to clear the right of first refusal from other Gaspetro shareholders, including many of the state-controlled gas distributors but also Japan's Mitsui Gas which owns the other 49pc stake. Mitsui acquired the asset from Petrobras in December 2015 for R1.93bn.

The planned transaction is another step towards Petrobras' anti-trust-mandated withdrawal from gas distribution and transport.

Compass already owns Sao Paulo-based Comgas, Brazil's largest gas distributor with 31pc of the domestic market share. Anti-trust agency Cade is nonetheless expected to approve the deal after it cleared Compass to bid late last year, overturning Petrobras' effort to disqualify it.

Compass has ambitious plans to expand in Brazil's increasingly dynamic gas market, with proposed investments in a regasification terminal in Sao Paulo state as well as a 280km (174mi) subsea gas pipeline project known as Rota 4 which will transport gas from large offshore pre-salt fields.