Suzano is offering $42 per share to shareholders of the NYSE-listed International Paper but the latter is likely to dismiss the former’s offer as inadequate
Suzano reportedly offers $15bn bid for International Paper. (Credit: Suzano S/A)
Suzano, a Brazilian paper and pulp producer, has reportedly offered an all-cash bid of around $15bn to US-based International Paper.
The Brazilian firm is offering $42 per share to shareholders of the New York Stock Exchange (NYSE)-listed International Paper, reported Reuters, citing undisclosed sources having knowledge of the development.
According to the new agency, Suzano conveyed its offer verbally to International Paper’s board of directors. The Brazilian company could launch a formal bid in the shortly, according to the sources.
One of the sources said that International Paper is likely to dismiss Suzano’s offer as inadequate.
In its securities filing, the Brazilian firm said it has not signed any agreements with its American counterpart for a possible merger, nor has the management of the company made any decisions on the possible transaction.
Suzano’s rumoured bid comes about a month after International Paper inked a £5.8bn agreement to takeover British packaging company DS Smith, beating a rival bid from Mondi.
Under the offer, International Paper will exchange 0.1285 of its shares for every share of DS Smith, which is listed on the London Stock Exchange. This values each of the DS Smiths’ shares at 415p.
The American pulp and paper producer estimates that the merger will create a corrugated packaging firm whose sustainable fibre-based packaging will account for about 90% of its revenue.
Both parties anticipate that the agreement will establish a global leader in sustainable packaging solutions, with a focus on North American and European markets.
The shareholders of DS Smith will own 33.7% of the combined company, while the owners of International Paper will own the remaining 66.3%, according to the share exchange ratio.
The business combination is expected to be completed by Q4 2024, assuming regulatory clearances in the US and Europe as well as shareholder approval from both packaging companies.
Reuters said that Suzano’s offer could disrupt the DS Smith deal.
However, International Paper declined to comment on the development and said that it is currently focused on closing the previously announced deal with DS Smith.