Corporate Finance

Eldorado e Celulose Sold for R$15 Billion

Brazilian group J&F has sold cellulose producer Eldorado e Celulose to Netherlands-based Paper Excellence for R$15 billion, transferring 100% of the shares.   The transaction is expected to be finalized within the next 12 months.

Brazilian group J&F has sold cellulose producer Eldorado e Celulose to Netherlands-based Paper Excellence for R$15 billion, transferring 100% of the shares. The transaction is expected to be finalized within the next 12 months.


Established in 2007, Paper Excellence has grown by acquiring cellulose factories across Europe and Canada. It currently produces 2.5 million tons of paper per year. Reacting to the announcement, the company stated that the acquisition of Eldorado is important, as it adds assets of eucalypt production to its portfolio and the negotiations met the interests of both parties.

 

About Eldorado Celulose e Papel

The Brazilian company is owned by the brothers Joesley and Wesley Batista and it is specialized in the production of cellulose and paper. It registered a profit of R$288 million in 2016. Despite this figure, the brothers needed to sell their business, to pay for a fine of R$10.3 billion, that must be paid within 25 years, their sentence arising out off  the Lava Jato operation in Brazil, which aims to fight corruption in the country. Their strategy to pay the Brazilian government fine is to sell off assets.  

 

Assets sold in 2017

Throughout 2017, J&F sold several businesses. In August, it sold the dairy company Vigor to Lala, from Mexico. In June, J&F transferred 54.24% of its participation in Alpargatas to Itausa Cambuhy Investimentos e Brasil Warrant for R$3.5 billion. In the same month, slaughterhouses under the JBS brand in Argentina, Paraguay and Uruguay were purchased by Minerva, for R$300 million.

 

Legal side

The Brazilian firm Lefosse Advogados assisted J&F in the sale of Eldorado, while Paper Excellence received help from the Sao Paulo and New York offices of Sherman & Sterling LLP.

 

C.S.

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