Suzano to acquire industrial facilities from Pactiv Evergreen

Brazil-based pulp producer Suzano has acquired the industrial assets from Lake Forest, Illinois-based packaging company Pactiv Evergreen that will expand its operations in North America and mark its entrance into the consumer and food service packaging segments in the region.

The transaction is valued at $110 million and includes two mills in Pine Bluff, Arkansas, and Waynesville, North Carolina, that manufacture liquid packaging board and cupstock.

Subject to final regulatory approval that is expected later this year, the assets will add approximately 420,000 metric tons per year of integrated paperboard to Suzano's production capacity. Alongside the purchase, Suzano has signed a long-term supply deal with Pactiv Evergreen to provide liquid packaging board for its converting business.

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The acquired assets benefit from high availability of wood in the region, low energy costs and good access to railways, ports and highways, Suzano says. The company adds it currently is the largest supplier of hardwood market pulp in North America, with U.S. offices in Fort Lauderdale, Florida, and a research and innovation campus in Vancouver.

Already a major producer of materials for food and beverage packaging in Latin America, Suzano will work alongside Pactiv Evergreen’s team, leveraging its operational knowledge and experience in the paperboard business to enhance the structural competitiveness and profitability of the acquired assets, which already are “comparatively well-positioned on the cost curve of the North American packaging industry.”

“This acquisition is in line with our strategy,” says Fabio Almeida, Suzano’s executive vice president of paper and packaging. “We are entering the North American market as a competitive producer of paperboard, taking on quality assets that are strategically well-located from an operational and logistical perspective, and opening new opportunities for growth.

“As a business with 100 years of history behind us, we see this deal as an investment into our future and we look forward to building a long-standing and positive relationship with the teams at Pine Bluff and Waynesville, as well as the local communities around both facilities."

The completion of the transaction is subject to verification of customary conditions, including the approval by a foreign antitrust authority. Once approved, the acquisition will occur upon closing, with the price subject to typical economic and operational adjustments for this type of transaction. Suzano adds that the agreed upon value does not materially impact its financial leverage or debt levels.