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Blog Exposure - Brazilian Rivals Fibria and Suzano Announce Merger; Creating A Global Leader in Pulp

Stock Monitor: Verso Post Earnings Reporting

LONDON, UK / ACCESSWIRE / March 20, 2018 / Active-Investors.com has just released a free research report on Fibria Celulose S.A. (NYSE: FBR) (''Fibria''). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=FBR as the Company's latest news hit the wire. On March 16, 2018, the Company disclosed that its controlling shareholders, Votorantim S.A. and BNDES Participações S.A. (''BNDESPAR''), have signed an agreement with Suzano Holding S.A. (''Group Suzano'') and the majority shareholders of Suzano Papel e Celulose S.A. (''Suzano'') to merge the Company with Suzano. The cash plus stock deal valued at around 36 billion reais (approximately $11 billion) aims at the merger of the assets and the operations of both Companies and the corporate restructuring of the merged Company. The deal will lead to the formation of one of the largest producers of pulp in the world. Register today and get access to over 1000 Free Research Reports by joining our site below:


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Details of the Deal

As per the terms of the merger agreement, Suzano will acquire all of the outstanding shares of Fibria, and has offered to pay R$ 52.50 (fifty-two Brazilian reais and fifty cents) in cash and 0.4611 Suzano shares for each Fibria share. Additionally, Fibria's shareholders with Fibria's American Depositary Receipts (ADRs) will have the right to receive Suzano's ADRs, according to the Exchange Ratio. To ensure this, Suzano has registered the transaction with the US Securities and Exchange Commission (SEC) and plans to list Suzano's ADRs at the NYSE in the same segment where Fibria's ADRs are listed.

Suzano has clarified that the cash portion of the deal will be adjusted to include dividends, interest on equity, and other proceeds declared by the Companies, excluding dividends already declared. The Exchange Ratio is expected to be adjusted in proportion to any share split, grouping of shares, and bonus shares issued by Suzano and Fibria.

The agreement also has a provision for a termination fee, wherein if Suzano is unable to complete the transaction due to any restrictions from antitrust regulators, it will pay Fibria approximately R$ 750,000,000.00 (seven hundred and fifty million Brazilian reais). Once the deal is completed, Fibria's shares and ADRs will cease to be listed on the NYSE as well as Brazil's B3 S.A stock exchange.

The deal is subject to the receipt of approvals from relevant antitrust regulators, shareholders of both Companies, and the fulfilment of closing conditions. Suzano has received financial commitments of up to $9.2 billion from certain international financial institutions to complete the merger of Fibria.

The Board of Directors of Fibria will have a 15-day period to evaluate the merger terms. Meanwhile, until the transaction is completed, both Companies will continue operating their businesses independently.

Management Quotes

Commenting on the merger, Marcelo Castelli, Chief Executive Officer (CEO) of Fibria said:

''The combination of Fibria and Suzano will most certainly consolidate their paths of sustained development, operational excellence, individual dedication and talent, respect for the environment and local communities, and contributing to the country.''

Walter Schalka, CEO of Suzano added:

''Our dream of creating this Company is now becoming a reality. We plant, harvest, produce, and transform pulp, a renewable raw material that is the basis for products that are part of the lives of people all over the world. We are creating a future that is strong and kind.''

Benefits of the Deal

Suzano is expected to become the number one player in the Brazilian pulp market and the largest Brazilian Company in the agribusiness sector. The merger of Suzano and Fibria brings together two Companies with similar values and principles.

The merged Company will have 11 industrial units, with an annual production capacity of 11 million tons of market pulp, 1.4 million tons of paper, and annual exports of approximately BRL 18 billion.

Both Companies have a combined investment plan for FY18 which exceeds BRL 6.4 billion. The merged Company is expected to have one of the lowest cash cost in the sector globally, which indicates its increasing strength in the highly competitive global market.

Suzano expects that the deal will be highly accretive to its cash flows and help it maintain investment grade even after the merger. The transaction is expected to result in synergies of BRL 8 billion to BRL 10 billion from areas like forestry, logistics, and procurement.

About Fibria Celulose

Sao Paulo, Brazil-based Fibria is a world leader in eucalyptus pulp production. Pulp is a raw material used for making educational, health, hygiene, and cleaning products. It has an annual pulp production capacity of 7.25 million tons. The Company has over 1,056,000 hectares of forests including 633,000 hectares of planted forests, 364,000 hectares earmarked for environmental preservation and conservation, and 59,000 hectares allocated for other uses. The Company exports the pulp produced to over 35 countries.

About Suzano Papel e Celulose

São Paulo, Brazil-based Suzano is a publicly-held Company, controlled by Suzano Holding. The Company is the world's second-largest producer of eucalyptus pulp, one of the five largest market pulp producers, and the regional leader in paper for household and commercial use. The Company's business is focused in two segments, namely (i) market pulp (paper grade and fluff), and (ii) paper (coated and uncoated printing and writing paper), paperboard, and tissue paper. The Company exports pulp to 31 countries, and paper to over 60 countries. The Company has also extended its business to include manufacture of fluff pulp, which is used to make diapers and sanitary napkins; lignin extraction as part of its bio-refinery concept; and manufacture of paper reels for conversion into tissue paper.

Stock Performance Snapshot

March 19, 2018 - At Monday's closing bell, Fibria Celulose's stock slightly fell 0.05%, ending the trading session at $19.46.

Volume traded for the day: 2.08 million shares, which was above the 3-month average volume of 1.70 million shares.

Stock performance in the last month - up 16.46%; previous three-month period - up 34.58%; past twelve-month period - up 118.41%; and year-to-date - up 32.38%

After yesterday's close, Fibria Celulose's market cap was at $12.06 billion.

Price to Earnings (P/E) ratio was at 32.65.

The stock has a dividend yield of 1.08%.

The stock is part of the Consumer Goods sector, categorized under the Paper & Paper Products industry.


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