Clearly, the world of Corrugated Case Material (CCM) and corrugated board is racing with, perhaps, a new mega-concentration in sight… After having outbid Mondi‘s offer, International Paper (IP) has signed an agreement to buy the DS Smith group (see our information published on April 16). However, according to the Reuters agency, the Brazilian giant Suzano is preparing the acquisition of IP for some $15 billion in cash ($42 per share), which would however be conditional on the abandonment of the DS Smith takeover project.
In response to these rumors, Suzano indicated, in a press release published on May 7: « The Company is continuously analysing market opportunities and investments aligned with its strategy. Nevertheless, the Company clarifies that, to date, there is no formal document or celebration of any agreement, binding or otherwise, by Suzano, nor any decision or resolution of its management bodies regarding the potential operation reported by the media. The Company also informs that it has conducted the relevant internal investigations and inquired its administrators about the news reported in the media before providing this clarification. The Company reiterates its commitment to keeping the market duly informed regarding any relevant information. »
The same day, IP issued this press release: « Consistent with its standing practice, International Paper offers no comment on rumors or speculation contained in recent media reports. 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. The company is also focused on completing its previously announced combination with DS Smith, which offers a unique and highly compelling opportunity to create significant shareholder value above its base plan. » A subject to follow closely.
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