Suzano had offered an all-cash acquisition worth USD 15 billion to International Paper, which reportedly asked for a deal worth USD 17.3 billion. Suzano said that it had reached the ‘maximum price’ for the transaction to generate value for itself, ‘without engagement’ from the other party.
Jun 29, 2024
Suzano has ended all talks to buy International Paper, after the U.S.-based firm did not engage with the highest price it was willing to pay.
In its filing on June 26, Suzano said that it has reached what it believes to be the ‘maximum price’ for the transaction to generate value for itself, ‘without engagement’ from the other party.
“In observance of its commitment to capital discipline, Suzano formalizes that it will not pursue a transaction involving the acquisition of International Paper,” it noted.
Suzano, one of the world’s largest pulp manufacturers, said in May that it was interested in assets owned by International Paper, following an article in a leading news agency. The article had reportedly said that Suzano had approached International Paper to express interest verbally in an all-cash acquisition worth USD 15 billion.
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However, International Paper rejected Suzano’s offer of all-cash purchase valued at about USD 42 per share. As per sources, the Memphis-based global forestry and paper company had refused to accept any offer less than USD 50 per share, totalling to USD 17.3 billion.
Suzano had initially explored securing debt financing to back its bid. It communicated to International Paper that the offer would be subject to the latter terminating its agreement with DS Smith. International Paper has refrained from commenting on Suzano’s overture, stating that the company remained focused on finalizing its transaction with DS Smith.
The latest development has cleared a major hurdle for International Paper to proceed further with its all-stock takeover offer of 5.72 billion pounds to British paper packaging firm DS Smith.
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The proposal by IP in May had set the stage for a multi-billion-pound transatlantic bidding war with Mondi, which in February offered an all-share acquisition deal to its UK rival worth 5.14 billion pounds.
DS Smith had later announced that it was progressing its discussions with International Paper regarding the proposal. It said the Board acknowledged the strategic merits and potential for value creation through a combination with International Paper.
