GE Investing, Expanding in Brazil

May 29, 2012
$300 million stake in EBX, seeking new business in resource-rich area

General Electric Corp. entered a “strategic investment agreement” with Brazil’s EBX Group, a portfolio created to hold several mining, logistics and oil-and-gas companies, and aims to participate in Brazilian industrial development projects — in particular oil-and-gas projects. GE will invest $300 million in exchange for a 0.8% preferred equity interest in the Centennial Asset Brazilian Equity Fund LLC and other EBX ventures.

GE and EBX said the investment would be used to improve EBX’s capital structure and also help to finance EBX founder Eike Batista’s future investment projects. GE chairman Jeff Immelt said, “by strengthening our existing relationship, this investment opens up more opportunities in key resource-rich areas of the world.”

"Once again GE makes an innovative move focused on growth opportunities in Brazil," said Reinaldo Garcia, president and CEO of GE Latin America. “The company believes in this country and this investment will help accelerate the operations of one of GE's strategic partners that, over the years, has played an important role positioning Brazil as an entrepreneurial country on the international stage.”

The partners said the new investment is in line with their respective objectives, and cements their current relationship: GE supplies equipment and services to EBX’s mining, power generation, and oil-and-gas exploration and refining interests.

GE added that the new investment underscores its plans to expand certain industrial subsidiaries at EBX’s LLX Açu Superport project — a development to create South America’s largest industrial port, able to handle least 350 million tons of imports/exports annually. Now under construction on a 90-km2 site north of Rio de Janeiro, it would be one of the three largest port complexes in the world. As planned, it would include two steel mills, two cement factories, a power generation complex, an automaking plant and auto parts suppliers, a metal service center, a terminal for storing and processing oil, and an offshore support services and IT complex.

Total investments for LLX Açu Superport are estimated at more than $40 billion.

Batista, the controlling shareholder of EBX, said: “GE’s investment further solidifies what has been a great working partnership that taught us the value of having access to GE’s state-of-the-art equipment, services, and technologies and worldwide expertise across so many industries, especially because in today’s business environment this is a key component for any large industrial group such as ours.”

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