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April in talks to acquire Lwarcel: Reuters
Posted on Wednesday, 16 May 2018 14:39
Singapore-headquartered fibre plantations developer April Group has opened discussions over a potential acquisition of Brazilian industrial conglomerate Lwarcel Celulose, according to Reuters.

Citing two people in the know, the news provider said the parties are currently in exclusive talks over the potential combination after April submitted the highest bid in an auction process.

The sources, who did not wish to be identified as the process is still private, noted that Empresas Copec, Altri SGPS and Shanying Paper Industry were among the others who expressed an interest in the business.

No further details on when a deal can be expected to occur have been disclosed at this time and none of the parties have made any statement on the matter, with the exception of April, which said only that it regularly monitors developments in the global pulp industry.

Reports on a sale of Lwarcel emerged back in February, when Valor Econômico reported that the Trecenti family could put the business on the block.

A subsequent article by Estadão in early April said the company could be valued at between BRL 1.50 billion (USD 407.01 million) and BRL 1.80 billion.

Lwarcel has been producing pulp from unbleached pine since 1986 and currently generates 250,000 tonnes of eucalyptus hardwood pulp, which is used in the manufacturer of many types of paper, every year.

According to Zephyr, the M&A database published by Bureau van Dijk, there have been seven deals targeting pulp mill operators announced worldwide since the beginning of 2018.

The most valuable of these was worth USD 310.29 million as Pelangi Prestasi agreed to take over Malaysia-headquartered Sabah Forest Industries back in early April.

This was followed by a USD 220.49 million share placing by Chinese player Henan Yinge Industrial Investment, through which it planned to issue stock equating to a 16.7 per cent shareholding to institutional investors.

Other companies in the sector to have been involved in deals this year include Ence Energia y Celulosa and Sappi.

© Zephus Ltd