Brazil's Suzano discusses higher bid for International Paper, sources say

Suzano SA

20/05/2024 22:29

(Adds background on the talks in paragraphs 6-11)
    By Anirban Sen and David French
       May 20 (Reuters) - Brazilian pulp and paper company
Suzano  SUZB3.SA  has been in talks with its advisers about
sweetening its $15 billion acquisition offer for International
Paper  IP.N , people familiar with the matter said on Monday.
    Reuters reported earlier this month that Suzano had
approached International Paper to verbally express interest in
an all-cash acquisition that was worth roughly $42 per share.
Such a deal is conditional on International Paper abandoning its
agreement to acquire British packaging firm DS Smith  SMDS.L 
for $7.2 billion. 
    International Paper rejected Suzano's initial approach, and
Suzano is discussing raising its offer by a few dollars per
share, one of the sources said.
    The sources cautioned there is no certainty that a new bid
from Suzano would succeed and asked not to be identified because
the matter is confidential.
    Suzano, International Paper and DS Smith did not immediately
respond to requests for comment. 
    Suzano's acquisition overtures risk disrupting International
Paper's campaign to convince its shareholders to back the DS
Smith deal. International Paper will set a date soon for its
shareholders to vote on the DS Smith transaction.
    International Paper's shares jumped more than 1.3% during
market hours on the news on Monday, and further extended gains
in trading after the bell. Shares of Suzano, which has a market
value of 67.1 billion reais ($13.15 billion), closed up more
than 1% in Brazil. 
    Earlier in May, Suzano's outgoing Chief Executive Walter
Schalka said the company's management "will not do anything that
could put the company at risk", without commenting on its talks
with International Paper. 
    Suzano is in the middle of a CEO transition. It has tapped
Joao Alberto Fernandez de Abreu, the former head of rail
operator Rumo  RAIL3.SA , as its new CEO to replace Schalka, who
has led the company for 11 years.
    Suzano's interest in International Paper comes at a time
when the global packaging industry is consolidating. Last year,
Ireland-based Smurfit Kappa  SKG.I  agreed to combine with
U.S.-based WestRock  WRK.N  in a deal worth $20 billion.

    ($1 = 5.1038 reais)
  

 (Reporting by Anirban Sen and David Fench in New York
Editing by Greg Roumeliotis and Lisa Shumaker)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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