CMPC in Talks to Buy Aracruz Guaiba Unit for $1.4 Billion
Sept. 24, 2009 - Chilean forest products group Empresas CMPC is in talks to buy Aracruz's Guaiba pulp, paper and wood producing unit for $1.4 billion.
CMPC on Sept. 22 in a regulatory filing announced that it signed a memorandum of understanding with Aracruz to buy the Guaiba unit. According to the deal, Fibria, the newly formed company that resulted from the merger of Aracruz and Votorantim, will hold exclusive talks with CMPC until an agreement is made.
The Guaiba unit, located on the southern tip of Brazil, produces about 450,000 tons of market pulp and 50,000 tons of printing and writing paper. The unit also owns 212,000 hectares of land of which 60 percent is eucalyptus that the company uses internally and sells on the open market.
The deal would allow CMPC, controlled by Chile's Matte family, to become the world's second-largest pulp producer by 2013, with capacity of 3.8 million metric tons, a Reuters news report said.
According to the regulatory filing, CMPC's board will ask shareholders to approve a share sale plan of $500 million and a bond issuance worth up to $500 million to fund the acquisition
SOURCE: Reuters, CMPC, Fibria