In a potential transaction marred by information leaks and pressure for a price increase, Suzano has decided not to proceed with its proposal to acquire International Paper (IP). This decision comes amid the ongoing acquisition of British rival DS Smith by the American company. The purchase of DS Smith would inevitably increase the value and complexity of the transaction, discouraging the Brazilian company from continuing negotiations, which had already set the termination of talks with DS Smith as a precondition, according to information obtained by Valor.
In a statement on Wednesday, Suzano announced that after “some discussions” with IP, it reached what it “understood to be the maximum price at which the transaction would generate value,” without “engagement from the other party.” “It should be noted that it has always been a condition for Suzano to proceed with this transaction that there be engagement between the parties on private, confidential, and amicable terms. Since it was not possible to advance in this manner, Suzano chose to end the discussions,” the statement said.
Reuters revealed the Brazilian company’s approach to IP in early May, information that was confirmed by Valor. The purchase proposal, still in its informal phase, was estimated at $15 billion, roughly equivalent to IP’s market value at the time, or $42 per share. Suzano considered increasing the offer and found support from analysts and rating agencies, which believed the company had the balance sheet strength to handle the operation.
On Tuesday (25), IP and DS Smith issued a new statement regarding the progress of their negotiations, announcing the end of the initial review period by regulators concerning potential competition issues.
