November 29, 2018 / 3:55 PM / 14 days ago

UPDATE 1-Suzano bid for Fibria wins conditional EU regulatory approval

(Adds details)

By Foo Yun Chee

BRUSSELS, Nov 29 (Reuters) - Brazilian pulp and paper producer Suzano Papel e Celulose secured conditional EU regulatory approval on Thursday to buy Fibria Celulose to create the world’s biggest wood pulp producer.

The European Commission said Fibria had agreed to end its exclusive sales deal with Brazilian peer Klabin, and help create a competitor in Europe, to address EU antitrust concerns.

Fibria has acted as the exclusive sales agent for all sales of bleached eucalyptus kraft pulp - an input to the paper, tissue and packaging industry - produced by Klabin outside South America.

Fibria will also transfer assets such as its storage capacity at European ports, shipping contracts and personnel to Klabin, making it easier for Klabin to sell bleached eucalyptus kraft pulp in Europe.

The merger of Suzano and Fibria will create a company that will lead world pulp production with annual capacity of 11 million tonnes. That is more than double the 5 million tonnes of capacity at the world’s second-largest producer, International Paper Co, according to consultancy Poyry. (Reporting by Foo Yun Chee; editing by Philip Blenkinsop and Susan Fenton)

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