International Paper: Suzano’s Failed Takeover Bid Does Not Change Our Long-Term Thesis

It was reported on June 27 that Suzano, a Brazilian packaging manufacturer had withdrawn its takeover bid for International Paper. Last month, it was reported that Suzano offered to acquire International Paper for $15 billion, representing $42 per share. Contingent for the deal would be that International Paper would have to cease its acquisition of DS Smith. International Paper rejected this initial offer, and it appears the sides never engaged in negotiations. Now, Suzano has officially dropped its takeover bid without issuing a stronger offer. Given that this outcome was largely expected, we are maintaining our $40 fair value estimate.