China Merchants Port Holdings is to acquire a 90% stake in TCP Participações, which operates the Terminal de Contêineres de Paranaguá in Brazil, for approximately R$2.89 billion (US$927 million).

The terminal is located at the Port of Paranaguá, in the state of Paraná in southern Brazil. It is the second-largest container terminal in the country and has a capacity of 1.5 million TEUs per year, with a planned expansion set to double that by the second half of 2019.

“TCP is not only CMPort’s cornerstone to enter Brazil, but also the future hub of the rising commodity and goods trade flow between Brazil and China,” said Jingtao Bai, managing director of CMPort. “CMPort will also leverage its international port operation experience and local connectivity to help TCP continue its success story as one of the leading ports in Brazil and Latin America.”

The acquisition will allow CMPort to expand its overseas port network in the region as well as develop its logistics business through TCP Log, a wholly owned subsidiary of TCP which offers door-to-door integrated logistics solutions.

“Brazil is the largest economy in Latin America with huge market potential and abundant resources and reserves,” said Jianhua Hu, vice chairman of CMPort and executive vice president of China Merchants Group. “Brazil is also a member of the BRICS group of nations and is China’s most important comprehensive strategic partner and trade counterpart in Latin America. The transaction serves CMG’s intention to promote commercial cooperation with the BRICS countries and the China Brazil Joint Action Plan. The transaction will help us achieve our commercial objectives, and at the same time, enhance the trade development between Brazil and China and the comprehensive strategic cooperation relationship of the two countries.”

The transaction will be funded by a combination of internal resources and external debt financing, according to CMPort.