Suzano, Latin America's largest pulp and paper producer, is reportedly considering a higher offer for International Paper after previously preparing a US$15 billion acquisition bid earlier this month. Despite initial denials of these rumors, Suzano has now confirmed its interest in a merger.
Recent reports suggest Suzano is collaborating with advisors to increase their bid for International Paper, as the initial US$15 billion offer was deemed insufficient. Allegedly, the company is securing funds from banks like Mizuho Financial Group, Nomura Holdings, and Mitsubishi UFJ Financial Group to support a higher offer. This funding strategy would be similar to Suzano’s US$11 billion acquisition of pulp rival Fibria in 2018, which included a bridge loan and a pre-export finance facility, with Mizuho among the leading lenders.
Following Reuters' revelation on May 7 about Suzano's approach to International Paper, Suzano's investors reacted negatively, causing the company's stock to drop over 17% since May 6. Shares of Suzano fell up to 1.5% in early trading in São Paulo last week, while International Paper's shares declined by as much as 2.1% in New York, although they are still up 27% since May 6.
Currently, International Paper is in the process of acquiring DS Smith for £5.8 billion (US$7.2 billion) after a bidding war with Mondi. A potential deal with Suzano could complicate and possibly terminate the DS Smith merger.