Brazilian pulp and paper company Suzano said it is officially backing down from pursuing the acquisition of International Paper, according to a securities filing late Wednesday.
It was first reported in early May that Suzano was approaching IP about purchasing it. That news broke just weeks after IP announced plans to acquire British paper packaging company DS Smith. It added another layer of complexity to a deal that had already seen IP compete with Mondi for the DS Smith takeover.
IP acknowledged the reports of Suzano’s interest, but CEO Andrew Silvernail told financial analysts in late May that his company was not actively engaged with Suzano.
Suzano said Wednesday it reached what it believed to be “the maximum price for the transaction to generate value for Suzano, without engagement from the other party.”
“It is important to emphasize that it has always been a condition of Suzano for the completion of this transaction that the engagement between the parties be based on private, confidential, and amicable terms. As it was not possible to proceed in this manner, Suzano has decided to terminate the negotiation,” said the company in a filing signed by Chief Financial and Investor Relations Officer Marcelo Feriozzi Bacci.
IP’s stock price was initially down following the news.
DS Smith CEO Miles Roberts said last week that its sale to IP “remains fully on track” for Q4 completion. The companies announced Tuesday that they hit the expiration of the waiting period under the Hart-Scott-Rodino Act — a milestone indicating U.S. antitrust regulators have not requested additional information and aren’t expected to challenge the deal.
The companies are still awaiting some other greenlights, including from the European Commission. Roberts said last week that shareholder votes would occur after the prospectus is filed, likely in late August or September.
Other major packaging M&A deals have also recently received key clearances.
Berry Global also announced this week the expiration of the waiting period under HSR to spin off its Health, Hygiene and Specialties segment to Glatfelter. The companies expect the deal to close in the second half of 2024, pending approval by Glatfelter shareholders and other closing conditions.
And on Thursday morning, Smurfit Kappa and WestRock announced they have now obtained all outstanding regulatory clearances for their combination. That deal is set to close July 5.
