According to Reuters, Suzano has expressed its interest in an all-cash acquisition of International Paper worth almost $15 billion – a move that could disrupt International Paper’s acquisition of DS Smith.

International Paper recently agreed to an all-share combination with DS Smith; the move superseded the €11.7 billion merger proposed by Mondi earlier this year, is said to be worth $7.2 billion (€670,165,2000), and is expected to close by the end of this year.

A potential acquisition of International Paper could disrupt the deal, Reuters explains, with the offer said to depend on International Paper abandoning its efforts to buy DS Smith.

According to anonymous sources, Suzano has verbally communicated its $42-per-share offer to International Paper’s board of directors; a formal bid could be submitted in the coming days. One source suggested that International Paper could reject Suzano’s offer as inadequate.

During a securities filing, Suzano reportedly commented that it has not signed an agreement with International Paper for a potential business combination; nor has its management made any decision regarding a potential deal.

Reuters says that International Paper’s shares have risen by as much as 12%, which gives the company a market capitalization of around $13.5 billion (€125,589,150,000); its shares are thought to have closed up by over 5%.

Meanwhile, Suzano’s market value is placed at around 77.6 billion reais (€142,277,649,756.80), yet its shares have reportedly closed down by more than 12% in Brazil. A 39% decline was reported in its fourth-quarter net profit in 2023, which Reuters attributes to lower pulp prices and the resultant impact on revenue.

Reportedly, Suzano is considering lining up debt financing to support its bid for International Paper. A combination could help Suzano expand its contribution to the European packaging sector and deliver annual pre-tax cash synergies of at least $514 million (€478,169,060).

International Paper has declined to comment on the matter in favour of completing its deal for DS Smith.

In a statement, International Paper said: “The IP team, led by new CEO Andy Silvernail, is executing on business strategies and pursuing commercial and cost improvement initiatives across the portfolio to achieve best-in-class profit margins and significant earnings growth. In addition, as industry conditions continue to improve, IP will come out of a cyclical bottom for earnings.”

Late last year, Smurfit Kappa and WestRock entered discussions for a merger to create Smurfit WestRock; the combined company was anticipated to be worth around $20 billion (€186,039,000,00).

The merger was agreed a week later. Shareholders were urged to voice their own agreement on the matter, with the combination scheduled to be completed in the second quarter of the 2024 calendar year, subject to customary closing conditions like shareholder and regulatory approvals.

Update: According to reports, Suzano has commented on this news, saying: “There is no formal document or celebration of any agreement, binding or otherwise, by Suzano, nor any decision or resolution of its management bodies regarding the potential operation reported by the media.”

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