January 30, 2018 / 11:02 AM / 3 months ago

CORRECTED-Brazil's Fibria approached by Paper Excellence to create pulp behemoth -newspaper

(Corrects share close, paragraph 7)

SAO PAULO, Jan 30 (Reuters) - Brazilian pulpmakers Eldorado Brasil Celulose SA and Fibria Celulose SA may form a joint venture to combine operations at Três Lagoas, in the state of Mato Grosso do Sul, Valor Econômico reported on Tuesday without naming sources.

Fibria, the world’s largest maker of eucalyptus paper, has received a proposal to begin talks from Netherlands-based Paper Excellence, which acquired a majority stake in Eldorado last year, Valor said.

The combination would create a company with the capacity to produce nearly 5 million tonnes of pulp per year and annual revenue of roughly 10 billion reais ($3.2 billion), Valor reported.

Fibria and Paper Excellence would have “distinct” stakes in the venture, Valor said, without elaborating.

Eldorado Brasil and Paper Excellence were not available for immediate comment. Fibria declined to comment.

The joint venture would combine three plants in Três Lagoas, Valor reported, referring to Eldorado’s single unit and two Fibria production facilities.

Fibria’s shares were up almost 8 percent in early trading on Monday on reports that Paper Excellence was considering acquiring it. It closed at 55.35 reais, up 5.23 percent.

$1 = 3.1549 reais Reporting by Ana Mano; editing by Jason Neely

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