Brazil's Suzano Papel e Celulose Makes Bid for Conpacel Assets

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Researched by Industrial Info Resources (Sugar Land, Texas)--Brazilian company Suzano Papel e Celulose (SAO:SUZB5) (Sao Paulo), a producer of pulp, paper and forestry products, has put forth a takeover offer to buy 50% of the assets of the Limeira pulp and paper mill in the state of Sao Paulo. Suzano currently owns 50% of the mill, while the remaining 50% is owned by celulose and paper company Conpacel (Limera, Sao Paulo). The estimated cost of the transaction is valued at approximately $900 million.

Suzano and Conpacel have shared ownership of the Limeira mill since 2004. According to company officials, the terms of the transaction are open until January 31. If it is approved, Suzano will hold 100% of Conpacel's assets which will allow the firm a greater profitability and increased competitiveness in the market.

Located in the city of Limeira, the mill began operating in 1965. It has an annual production capacity of 630,000 tonnes of kraft softwood unbleached pulp and 390,000 tonnes of paper. It is also equipped with a 27-megwatt (MW) cogeneration power plant, which provides steam and electricity to the facility. At present, approximately 3,200 people work at the mill.

Suzano Papel e Celulose has five operational plants in the states of Bahia and Sao Paulo, and exports products to more than 80 countries.

Conpacel is a joint venture of Fibria Celulose SA (NYSE:FBR) and Suzano. The company produces 390,000 tons of printing paper per year.

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