* ALL would hold 63.5 percent equity in new company
* Cosan's Rumo would name most of the board, have control
* Rumo pricing ALL shares at premium of 56 percent
By Reese Ewing and Roberta Vilas Boas
SAO PAULO, Feb 24 (Reuters) - Brazilian sugar and ethanolfirm Cosan SA proposed on Monday to take over AmericaLatina Logistica SA in a $4.7 billion deal that wouldform Latin America's largest railway and logistics company.
The planned takeover, which Cosan officials expect ALL'sboard and shareholders to approve, would create a new logisticalgiant in a country where access to cheap transportationinfrastructure comes at a premium.
By creating a bigger player in the sector that is stillunderdeveloped by Cosan, chairman and controlling shareholderRubens Ometto will further his conglomerate's interests rangingfrom agribusiness to fuel distribution. Under the terms of thedeal, shareholders of ALL, as America Latina Logistica iscommonly known, would own most of the capital of the combinedentity, while Cosan would name most of its board members.
"We think the operational integration of ALL and (Cosan's)Rumo could result in quick wins due to asset turnoveroptimization to transport sugar, ethanol and soybeans," UBSSecurities analyst Victor Mizusaki wrote in a client note.
In a separate securities filing, ALL said the combined valueof the new company would total 10.96 billion reais ($4.7billion), of which ALL shareholders would hold 63.5 percent. Cosan is proposing to value ALL shares at 10.184 reais per share, a 56 percent premium to its closing price on Friday.
The new company will merge ALL's assets into Cosan's RumoLogistica SA unit. Cosan will spin off the logistics unit andlist its shares on the Sao Paulo exchange, Cosan said in asecurities filing.
"Rumo is a cash generator, so the resulting company willhave good cash flow," Cosan Chief Executive Officer Marcos Lutzsaid in a call with investors.
ALL shares soared as much as 14 percent in São Paulotrading, while Cosan gained as much as 5.6 percent. That helpedpare back ALL's 28 percent drop over the past year and Cosan's21 percent decline in the same period.
Shares of Cosan closed at 36.60 reais, up 3.5 percent onMonday. ALL closed 8.9 percent higher at 7.10 reais.
BOOST TO RAIZEN VENTURE
The railway assets of ALL would also add value to Cosan's50-50 joint venture with Royal Dutch Shell Plc known asRaizen, which is the main competitor of state-run oil companyPetróleo Brasileiro SA in fuel distribution inBrazil.
"ALL is a unique asset. Rail is the most efficient, in termsof costs, to transport in an area where there are no waterways,"Lutz added.
President Dilma Rousseff has struggled over the past yearsto expand Brazil's aging port terminals and railway capacity,despite the country's prowess as a key supplier of many of theworld's commodities such as sugar, coffee, soybeans, orangejuice and meats.
LONGTIME TARGET
The move follows a long struggle by Cosan to find a way tocombine its logistics assets with ALL, which for years was thelargest railway operator in Latin America. Cosan relies on ALLto transport much of its sugar to port in Santos.
Ometto attempted in August to buy a controlling stake in ALLbut was rebuffed by the company.
Lutz said that if ALL approves the deal, which he expects,the capacity contract that Rumo holds with ALL to transport itssugar to port would end. The contract has been the focus of alegal dispute between the two companies after ALL stoppedtransporting Rumo's sugar, driving up its freight costs.
ALL said it stopped service because Rumo had ceased paymentson the contract. A merger may offer a way out of the costlylawsuits that would otherwise be fought out in the courts.
Cosan will also list the shares of Cosan Energia SA, a unitthat houses Cosan's sugar and ethanol, fuel distribution,natural gas distribution, lubricants and land managementdivisions, the filing added.
