Suzano has communicated its USD 42 per share offer to International Paper’s board of directors verbally, and is likely to submit a formal bid in the coming days.
May 9, 2024
Brazilian pulp and paper company Suzano has offered an all-cash acquisition that would be worth almost USD 15 billion to its U.S.-based rival, International Paper.
As per media reports, Suzano has communicated its USD 42 per share offer to International Paper’s board of directors verbally, and could submit a formal bid in the coming days. International Paper was poised to reject Suzano’s offer as inadequate, it added.
The development comes less than a month after International Paper agreed to buy British packaging firm DS Smith for USD 7.2 billion, beating out a rival bid from London-listed Mondi. This deal, which is scheduled to close by the fourth quarter of 2024, could be disrupted were Suzano to press ahead with its bid for Memphis-based International Paper.
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Suzano said in a securities filing recently that it has neither signed any agreement with International Paper for a potential business combination nor has any decision been made by the company’s management in respect to a potential deal.
Suzano, one of the world’s largest pulp manufacturers, is in talks to line up debt financing to support its bid, and has informed International Paper that the offer would be conditional on the latter abandoning its deal with DS Smith, the sources said.
International Paper declined to comment on Suzano’s approach, saying the company continued to focus on completing its deal for DS Smith.
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A statement by the US-based company said that the IP team, led by new CEO Andy Silvernail, was executing on business strategies and pursuing commercial & cost improvement initiatives across the portfolio to achieve best-in-class profit margins and significant earnings growth. In addition, as industry conditions continued to improve, IP would come out of a cyclical bottom for earnings, it added.
Suzano is considered as one of the largest pulp manufacturers in the world as well as one of the largest paper producers in Latin America. It also has a good reputation as one of the leaders in the toilet paper segment in Brazil.
