Suzano Papel e Celulose announces that it has received approval from the European Commission to complete the process of combining operations and shareholding bases with Fibria. Once the competitive assessment phase is completed by the regulatory agencies, the companies are ready to proceed with the completion of the transaction. The corporate reorganization will be completed on January 14, 2019, creating the fourth most valuable company in Brazil (excluding financial companies).
“We are about to turn a dream into a historic achievement for Brazil. We will join the best operational and sustainability practices of the two companies, the greatest talent and the most relevant innovation projects with a focus on renewable sources, “says President Walter Schalka.
The company will have a new brand and will be called Suzano after the conclusion of the corporate reorganization. Walter Schalka will be the president and will have at his side the following directors: Alexandre Chueri, Aires Galhardo, Carlos Aníbal, Christian Orglmeister, Fabio Prado, Fernando Bertolucci, Leonardo Grimaldi, Malu Paiva, Marcelo Bacci, Mariano Zavattiero, Pablo Machado and Vinícius Nonino.
Suzano will have a production capacity of 11 million tons of market pulp and 1.4 million tons of paper per year. The company will have approximately 37,000 direct and indirect employees and 11 manufacturing units, capable of supplying more than 90 countries and generating a volume of exports of R $ 26 billion in the last 12 months ended September 30, 2018. Between January and September of this year, the two companies reached R $ 10.1 billion in operating cash generation and R $ 24.5 billion in net revenue, two historical records in the sector. Together, they have invested R $ 4.9 billion in the first nine months of this year, numbers that demonstrate Brazil’s commitment to development.
The transaction will be completed according to the plan announced on March 16, 2018, when the agreement that gave rise to the transaction was signed. On September 13, 2018, the shareholders of Suzano and Fibria approved the terms of the corporate reorganization at their respective Extraordinary General Meetings.
All other conditions precedent for the merger of Suzano and Fibria were verified. The reorganization was unrestrictedly approved by the competition authorities in the United States (31/05), China (31/08) and Turkey (06/09). In Brazil, the agreement was approved by CADE – Administrative Council for Economic Defense – (11/10) and ANTAQ – National Agency of Waterway Transportation – (14/11), also without restrictions. On 29/11, the European competition authority also approved the reorganization, a decision subject to the early termination of the contract for the supply of short-fiber pulp between Fibria and Klabin SA
The corporate reorganization provides for a series of stages for its implementation. Each Fibria shareholder will receive, for each common share, 0.4611 common share issued by Suzano and R $ 52.50, adjusted as provided in the Protocol and Justification of Merger approved by the shareholders. The final total amount to be paid on the date of consummation of the transaction, on January 14, will be disclosed to the market on January 10.
As to the origin of the funds to be paid to Fibria’s shareholders, Suzano entered into commitments with international financial institutions to contract financing totaling US $ 9.2 billion, of which US $ 6.9 billion in a bridge loan with term and the remaining US $ 2.3 billion in six-year financing. The resources made available in the bridge loan operation formalized in March, however, were replaced throughout the year by new funding with more attractive conditions. Due to the strong cash generation for the period, the need for funding for the transaction was lower than initially expected.
As a result of the operation announced in March this year, Suzano shares will be traded on the New York Stock Exchange (NYSE) and Fibria shares will no longer be traded on B3 and NYSE by the end of January 3. Suzano ADSs are expected to be traded on the NYSE as of January 10. After the merger is completed, Suzano is starting to take a new path towards the future. “We are very motivated by the challenge of continuing to transform ourselves to generate even more positive impacts on society,” says Walter Schalka.