Suzano will not proceed with its plans to acquire International Paper, with Reuters explaining that the latter ‘did not engage’ with an offer of over $15 billion – meaning its deal to acquire DS Smith could go ahead as planned.
At the start of this year, Mondi expressed its interest in acquiring DS Smith in a merger expected to exceed €11.5 billion in value and create an ‘industry leader’ for paper packaging solutions in Europe. However, International Paper raised a counterbid and initiated a bidding war with Mondi – one that International Paper would ultimately win, agreeing to an all-share combination with DS Smith.
Shortly after, rumours arose that Suzano may disrupt the acquisition by proposing an all-cash acquisition of International Paper worth almost $15 billion, with the company even expected to raise its offer by a ‘few dollars’ per share in late May. The deal would have required International Paper to walk away from its agreement with DS Smith.
Now Suzano has terminated its plans to buy International Paper. Reuters cites a filing stating that the company “has reached what it believes to be the maximum price for the transaction to generate value” for itself, “without engagement from the other party.
“Therefore, in observance of its commitment to capital discipline, Suzano formalizes that it will not pursue a transaction involving the acquisition of International Paper.”
A press release from Suzano stated: “Following up on the Market Fact disclosed on May 22nd, 2024, informs its shareholders and the market in general that, after some negotiations with the International Paper Company regarding a potential transaction between the companies, the Company has reached what it believes to be the maximum price for the transaction to generate value for Suzano, without engagement from the other party. Therefore, in observance of its commitment to capital discipline, Suzano formalizes that it will not pursue a transaction involving the acquisition of International Paper.
“It is important to emphasize that it has always been a condition of Suzano for the completion of this transaction that the engagement between the parties be based on private, confidential, and amicable terms. As it was not possible to proceed in this manner, Suzano has decided to terminate the negotiations.”
Reuters adds that shares from Suzano are down 14.6% since the day before the news of the talks broke until their closing. International Paper’s shares are reportedly up 26.2% within the same time frame.
However, Suzano is still making business deals elsewhere. It recently announced that it will purchase a 15% stake in wood-based packaging materials producer Lenzing for €230 million. Suzano CEO Walter Schalka considers the move “a continuation of our strategy focused on investments that enlarge our addressable market in scalable and competitive business models and move us closer to the end-consumer.”
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