Monday, July 22, 2024

International Paper shares plummet as Brazilian company Suzano abandons takeover bid

International Paper Acquisition Talks End: Suzano Pulls Out

International Paper (IP) shares took a hit in intraday trading Thursday after Brazilian pulp and paper provider Suzano announced that it was no longer pursuing a purchase of its American rival.

Suzano’s Chief Financial Officer, Marcelo Feriozzi Bacci, attributed the breakdown in negotiations to International Paper’s lack of engagement. In a regulatory filing, Bacci stated that Suzano had reached the maximum price for the transaction to generate value for the company without any response from the other party. He did not disclose the specific price offered by Suzano.

Bacci emphasized the importance of private, confidential, and amicable engagement between the parties for the transaction to be completed. Since this was not possible, Suzano made the decision to terminate the negotiations.

This news comes after reports last month that Suzano had proposed a $15 billion, all-cash offer for International Paper, causing the latter’s shares to soar. However, Bacci clarified at that time that there was no formal agreement in place.

Following the announcement from Suzano, International Paper shares dropped 6.9% to $43.38 as of 11:45 a.m. ET Thursday. Despite this decline, the stock is still up 20% year-to-date.

The market reaction to Suzano’s decision to end the pursuit of International Paper highlights the uncertainty surrounding potential mergers and acquisitions in the pulp and paper industry. Investors will be watching closely to see how both companies navigate the aftermath of this failed deal.

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