(Updates with closing share price, other Ultrapar deals)
By Leonardo Goy
BRASILIA, Aug 2 (Reuters) - Shares of Brazil's Ultrapar Participações SA fell the most in two and a half years on Wednesday after antitrust watchdog Cade voted unanimously to reject its proposed acquisition of rival fuel distribution company Alesat Combustíveis SA.
All seven Cade councilors voted to block the deal.
The rapporteur of the case, João Resende, had said Ale, as the company is known, did not agree to a proposal to sell assets in 12 states to obtain the approval.
The asset sale would represent divestiture of 65 percent of the company's revenue, Resende said in his vote. Ultrapar´s unit Ipiranga is the second-largest fuel distributor in Brazil.
Ultrapar's fuel distribution unit, Ipiranga, announced its proposed acquisition of Ale for 2.17 billion reais ($696 million) in June last year.
This is the second deal blocked by the Brazilian antitrust watchdog in less than two months. Cade rejected on June 28 Kroton Educacional SA's proposed takeover of rival college operator Estácio Participações SA.
Ultrapar shares tumbled 4.9 percent to 71.15 reais on Wednesday, the largest drop since December 2014, paring back this year's gains to 5.4 percent.
Brazil's antitrust watchdog has yet to vote on another Ultrapar deal, the acquisition of Petrobras' liquified petroleum unit Liquigas Distribuidora SA. Petrobras agreed to sell the unit to Ultrapar last November.
The acquisition by Ultrapar has already been considered "complex", meaning the tie-up could create too much market power for the buyer. ($1 = 3.1201 reais) (Reporting by Leonardo Goy; Writing by Tatiana Bautzer; Editing by Matthew Lewis and Andrew Hay)