Brazil's Largest Pulp Producers, Suzano and Fibria, to Merge
March 16, 2018 – Brazil's largest pulp producers, Suzano Papel E Celulose S.A. and Fibria Cellulose announced that on March 15, the controlling shareholders of Suzano Holding S.A. and Fibria Celulose S.A. have agreed to a merger of the two companies.
Under the proposed terms of the deal: (a) Suzano being entitled to the total share capital of Fibria; and (b) Fibria's shareholders receiving, in exchange for each common share of Fibria (i) the amount of R$ 52,50 (fifty two Brazilian reais and fifty cents), adjusted by CDI from March 15, 2018 up until the effective payment date, to be paid in one installment on the closing date of the transaction; and (ii) 0,4611 common share issued by Suzano to be delivered on the closing date of the deal.
Suzano said that it has “executed binding commitments with certain international financial institutions to ensure financing lines summing up US$ 9,200,000,000.00 (nine billion and two hundred million US dollars), being the disbursement conditioned, among others, to the closing of the Transaction. The proceeds of such financing will be used to finance part of the Cash Payment and the exports of the companies.”
The closing of the transaction is subject to certain conditions typical to transactions of this nature, including the approval by antitrust authorities in Brazil and in other jurisdictions.
Suzano noted that “in the event burdensome restrictions are imposed by the antitrust authorities in Brazil and / or in other jurisdictions, Suzano may not close the Transaction, upon the payment by Suzano to Fibria of a break-up fee equivalent to R$ 750,000,000.00 (seven hundred and fifty million Brazilian reais). The break-up fee may apply to certain other conditions that prevent the closing of the Transaction, as expressly provided for in the Voting Agreement.”
Fibria is the world leader in eucalyptus pulp production with an annual pulp production capacity of 7.25 million tons.
Suzano is the second largest eucalyptus pulp producer and the fifth largest market pulp producer in the world. Suzano also holds a leading position in the Paperboard and Printing & Writing segments in Brazil. The company has the capacity to produce 4.54 million tons of pulp per year with 3.54 million tons as market pulp and 1 million tons integrated into its papermaking operations, i.e. printing & writing paper, paperboard, and tissue.
SOURCE: Suzano and Fibria