Fibria Celulose SA (ADR) (NYSE:FBR) Chief Executive Marcelo Castelli has denied rumors that his company has been in merger talks with rival pulp maker, Eldorado Brasil Celulose.
The Fibria CEO revealed that there are currently no ongoing talks or negotiations regarding a merger or acquisition deal with Eldorado Brasil Celulose. His announcement puts to rest previous rumors that the two companies might potentially be involved in a partnership. Despite denying the claims, Castelli also added that Fibria would be open to mergers and acquisition deals in the future.
“There is no ongoing negotiation of any kind,” stated Fibria.
Castelli also revealed that Paper Excellence, a company based in the Netherlands agreed to pay $4.7 billion for the acquisition of Eldorado in September last year. Fibria stated that it considered the evaluation as a dealbreaker and also as excessive in any merger negotiations. Castelli stated that his company is not shutting itself off to the possibility of a merger or acquisition in the future.
Both Fibria and Eldorado have manufacturing plants located at Tres Lagoas, which is in the Mato Grosso do Sul state. The two plants produce an average of 5 million tonnes of pulp combined every year and their combined annual revenue adds up to roughly $3.2 billion according to a report by Valor.
Valor also reported that Paper Excellence and Fibria would have distinct stakes in a potential deal. Neither of the two companies was available to comment on the matter. Firbria’s confirmed interest in a possible merger or acquisition deal in the future highlights the fact that the company is open to new opportunities that would arise from such dealings. Some of those advantages include joint resources that will allow more production capacity and a bigger stake in the market. The statement by the CEO was however not an invitation for such dealings although it would be taken as such. It was also not a confirmation of any deals to come in the near future.
Fibria stock closed the latest trading session on Tuesday at $17.84 after a 2.35 percent gain compared to the value of the stock during the previous close.