Both companies inked a binding share purchase agreement to execute the transaction, subject to approval of the Brazilian antitrust authority Administrative Council for Economic Defense (CADE).

As per the agreed terms, 58% of the stake will be owned by Tonon Family alongside 35% by the Fundo DGF Terra Viva while remaining 7% stakes to be owned by the Pinheiro Family.

Through this acquisition, the company is keen on increasing its sugarcane capacity by two-fold.

"Once concluded the operation, Tonon should crush in the current harvest (2013/14) approximately 8 million tonnes with nearly 6 million tonnes of own sugarcane," the Tonon said in a statement.

Paraiso operates two mills in partnership with US-based Amyris Inc., to produce renewable hydrocarbon fuel s farnesene, from sugar-cane juice.