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NOTICE TO THE MARKET

São Martinho acquires 3.9% interest in Santa Cruz mill,
increasing its stake from 32.18% to 36.08%

São Paulo, February 17, 2014 - SÃO MARTINHO S.A. (BM&FBovespa: SMTO3; Reuters: SMTO3 SA and Bloomberg: SMTO3 BZ) announces the acquisition of 3.9% equity interest in Santa Cruz S.A. - Açúcar e Álcool, increasing its non-controlling interest to 36.08%.

Additionally, considering that Santa Cruz owns 45.23% of the shares of Agropecuária Boa Vista S.A., the transaction will imply in the acquisition of an additional 1.76% in the latter.

The transaction amount is R$ 15.3 million, of which: (i) R$ 7.4 million is for the 3.9% increase in the equity interest held in Santa Cruz S.A. - Açúcar e Álcool; and (ii) R$ 7.9 million for the 1.76% increase in the equity interest held in Agropecuária Boa Vista S.A., a land management company.

The amount will be paid in three annual installments of R$ 5.1 million each, the first at the time of the agreement and the other two in the two subsequent years, adjusted by the savings account rate ("poupança").

To access the entire Notice to the Market, click here.