Shares in Brazilian pulp and paper company Suzano plunged on Tuesday following reports it plans to mount a bid to acquire US counterpart International Paper.
Suzano has approached Memphis-based International Paper and is on the verge of making an all cash offer that values the firm at $15.2 billion, or $42 per share, according to a Reuters report. The company wants to have financing lined up before it presents a formal offer, the report said.
Suzano’s shares tumbled 12.3% on Tuesday to BRL52.18 ($10.28) on the B3 stock exchange in São Paulo.
“The company is continuously analysing market opportunities and investments aligned with its strategy,” Suzano said in a securities filing. “Nevertheless, the company clarifies that, to date, 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.”
International Paper specializes in corrugated fiberboard. It operates 28 pulp, paper, and packaging mills, 200 converting and packaging plants, as well as 18 recycling plants, according to German consultancy Statista.
The acquisition would allow Suzano, the world’s largest pulp and paper company, to diversify its packaging business after it completes a BRL22 billion investment in the Cerrado project.
Its bid would come with some strings attached, however. One being that International Paper would have to cancel its $7.2 billion bid to acquire the UK’s DS Smith, Reuters wrote. That transaction was announced last month and is due to be completed by the end of the year.
International Paper’s shares rose 5.2% to $38.84 on the New York Stock Exchange.