Highlights

SÃO MARTINHO CONCLUDED THE MERGER OF NOVA FRONTEIRA BIOENERGIA

Announced in December, the merger was approved and concluded

in February 2017

In February 2017, São Martinho S.A., one of Brazil’s largest sugar and ethanol producers, concluded the merger of Nova Fronteira Bioenergia, a joint venture held in partnership with Petrobras Biocombustível since 2010. The Boa Vista mill, in Quirinópolis (GO), formerly owned by Nova Fronteira, is now fully controlled by São Martinho. As a result of the merger, the Company reinforced its position as one of the main players in the sugar and ethanol market in Brazil, with a current processing capacity of around 24 million tons of sugarcane per harvest.

The merger will allow São Martinho to structure and use its assets and operations in a more efficient manner. Management and activities will be unified, which will result in greater efficiency, synergy and optimization of financial and administrative costs, as well as more liquidity for all parties involved. The merger will also strengthen São Martinho’s competitive position, thus creating value in the long term.

Petrobras Biocombustível, which held 49% of Nova Fronteira Bioenergia, and other minority shareholders of this company received new São Martinho book-entry common shares with no par value, as a replacement for and in proportion to their interest in Nova Fronteira Bioenergia. São Martinho issued 24,023,708 shares, representing 6.59% of its capital stock, of which 24,000,000 shares were allocated to Petrobras Biocombustível and 23,708 to the minority shareholders of the merged company.

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