Brazilian pulp and paper giant Suzano has approached U.S.-based International Paper with a nearly $15 billion all-cash acquisition offer, sources revealed to Reuters. This proposal follows International Paper's recent agreement to acquire British company DS Smith for $7.2 billion, a deal expected to close by late 2024 and potentially impacted by Suzano's bid.
According to Reuters, Suzano has verbally communicated its $42-per-share offer to International Paper's board and may submit a formal bid soon. Despite this, International Paper is expected to reject the offer, viewing it as insufficient. Following the news, International Paper's shares surged by as much as 12% early Tuesday, reflecting a market valuation of about $13.5 billion, before closing up over 5%, Reuters reported.
Conversely, Suzano's shares in Brazil dropped more than 12%, with the company valued at 77.6 billion reais ($15.33 billion). The shares of DS Smith experienced a decline of up to 7.3% in London, although they recovered most of these losses to close down about 1%.
Suzano, the world's largest pulp producer, is currently securing debt financing for the bid and has informed International Paper that their offer hinges on the latter withdrawing from its deal with DS Smith. International Paper has declined to comment on the approach, focusing instead on finalizing its acquisition of DS Smith.
"The IP team, led by new CEO Andy Silvernail, is executing on business strategies and pursuing commercial and cost improvement initiatives across the portfolio to achieve best-in-class profit margins and significant earnings growth. In addition, as industry conditions continue to improve, IP will come out of a cyclical bottom for earnings," International Paper said in its statement. Suzano has declined to comment on the matter.
