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Fibria Celulose and Suzano Papel e Celulose ‘close to announcing merger’
Posted on Friday, 09 March 2018 11:08
Brazilian pulp and paper companies Fibria Celulose and Suzano Papel e Celulose are on the verge of agreeing terms on a merger, according to Valor Economico.

Citing Paulo Rabello de Castro, president of BNDES, a shareholder in both companies, the paper said talks have been taking place and a deal is getting close.

Reuters picked up on the report and cited an anonymous BNDES source as noting that the discussions are at an advanced stage, but a formal proposal has yet to be analysed.

This person said the shareholder is considering selling at least part of its stakes in both Fibria Celulose and Suzano Papel e Celulose and may use proceeds to finance an expected increase in demand for its loans in 2019.

None of the companies involved have issued any official statement on the matter as yet, and would not comment when contacted by Reuters.

There have already been 65 deals targeting paper manufacturers announced worldwide during 2018, according to Zephyr, the M&A database published by Bureau van Dijk. Those targeted include KapStone Paper and Packaging and Henan Yinge Industrial Investment.

Fibria Celulose was established through the merger of Aracruz Celulose and Votorantim Celulose e Papel in 2009.

The firm posted net revenue of BRL 11.74 billion (USD 3.59 billion) in 2017, up from BRL 9.61 billion over the preceding 12 months. Gross profit for the period totalled BRL 3.49 billion, compared to the BRL 2.51 billion recorded in 2016.

Suzano Papel e Celulose claims to be the world’s second-largest producer of eucalyptus pulp and the largest producer of printing and writing papers in Latin America.

The company has a history dating back 94 years and its products are sold in 60 countries.

Net income for 2017 stood at BRL 1.81 billion, an increase on 2016’s BRL 1.69 billion.

© Zephus Ltd