Government-controlled Brazilian oil giant Petrobras, Ultra group, in the gas, chemical and transport sector, and petrochemical company Braskem signed an agreement to acquire the businesses of Ipiranga group.

The value of the operation will be US$ 4 billion. Ipiranga operates in the oil refining, petrochemical and fuel distribution sectors.

Last year Ipiranga had net revenues of 30 billion reais (US$ 14.40 billion), with earnings before interest, taxes, depreciation, and amortization (EBITDA) of 1 billion reais (US$ 480 million) and net profit of 534 million reais (US$ 256 million).

"In line with its strategic planning, Petrobras is strengthening its presence on the national petrochemical sector, consolidating its distribution networks, mainly in the North, Northeast and Midwest, and expanding its presence in the various sectors in which it operates," stated Petrobras president José Sérgio Gabrielli de Azevedo.

Ultra will have the Ipiranga fuel distribution network in the South and Southeast of the country, and will continue running it under the Ipiranga brand. Petrobras will take over the Ipiranga distribution network in the North, Northeast and Midwest, and will have up to five years to use the Ipiranga brand, after which it will have to be replaced for the Petrobras Distribuidora brand.

Braskem will manage 60% of the assets of Ipiranga Group in the petrochemical sector. Petrobras will keep the other 40% of the Ipiranga group petrochemical activities.

The Ipiranga Refinery, in the southernmost Brazilian state of Rio Grande do Sul, will be equally controlled by Petrobras, Ultra Group and Braskem, who agree to proceed with the activities. The details of the agreement are included in a statement sent this morning to the Securities and Exchange Commission of Brazil (CVM).

Anba

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written by conceicao, March 19, 2007

Petrobras's participation in this deal should be disallowed on antitrust grounds. Petrobras
already produces almost all of Brasil's automotive fuel and letting it acquire one of the two
refineries that it does not already own is bad for consumers and the overall economy. Reminds me of
the government allowing Colgate to buy Kolynos and Brahma to buy Antarctica. If Lula or whoever is
trying to play Putin with a deal like this, he need look no farther than Mexico to see the trouble Pemex
is in and how the lack of competition in areas like telecommunications is holding back Mexico.

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This is good news
written by Ric, March 20, 2007

Other were considering the acquisition of Ipiranga. Petrobras is much better that the others.

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written by conceicao, March 20, 2007

Letting one company establish an effective refining monopoly is a prescription for disaster, especially a company with the government as a majority shareholder. The spread between what a
refiner pays for crude and then can sell it for fluctuates greatly in a free market. With a monopoly, the refiner can basically set the spread anywhere it wants and tell the consumer to lump it.
Petrobras should be divesting refineries not acquiring them. And, the market shares Colgate and AmBev enjoy in Brasil are harmful to consumers and exist only because of anticompetitive mergers.
The government should not let Petrobras have another refinery any more than it should let Rio Doce squeeze competitors through its control of infrastructure assets like ports and railroads. Why
allow one but not the other?

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Petrobras vs. PDVSA in Brazil?
written by Armando Rozário, March 21, 2007

The price per litre of ethanol in Brazil is about US$0.90 (ninety cents). The price of one litre of gasoline in Venezuela is about $0.05 (five cents). The ratio is anout 19:1 In gasoline the gap is even greater!
There is a huge gap and Petrobras wants to defend its share of the market in Brazil. You may check the e-mail which I had sent to Professor Franz J.T. Lee and confirm what I had just posted, here is the URL:
http://www.franzlee.org/pandemonium01266html [VENEZUELA NEWS BULLETIN] or at:
http://forum.atimes.com/topic.asp?TOPIC_ID=10001
Can Petrobras compete with PDVSA in Latin America? In North America?
Armando Rozário - Cabo Frio & Macaé
March 21, 2007

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VENEZUELA NEWS BULLETINS's URL
written by Armando Rozário, March 21, 2007

Here is the correct URL:

http://www.franzlee.org/pandemonium01266.html

You may also check the record profits of Petrobras & PDVSA in a Brazilian website, consult the column "Digital Photo Array" at this URL: http://www.jornalorebate.com [Text in English] posted by A.R. last month
Armando Rozário - Cabo Frio & Macaé - March 21, 2007 - petroamerica@gmail.com

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