Wednesday August 6, 03:45 PM
Brazil VCP buys $1.7 bln Aracruz stake, may merge
SAO PAULO , Aug 6 (Reuters) - Brazil's Votorantim Celulose e Papel (VCPA3.SA - news) said on Wednesday that it would increase its stake in Aracruz Celulose (ARCZ3.SA - news) for 2.71 billion reais ($1.7 billion) as part of a plan to merge the two companies.
VCP <VCPA4.SA><VCP.N>, as the company is known, said it had signed an agreement to buy the 28 percent stake held in Aracruz by Arapar SA, a holding company for the Lorentzen group. VCP already holds 28 percent of Aracruz and controls the company with the Safra and Lorentzen families.
As part of the Aracruz shareholder agreement, VCP will also have to offer to buy a 28 percent stake from Arainvest Participacoes, the holding company for brothers Joseph and Moise Safra. Arainvest has 90 days to make a decision on the sale, VCP said.
Should Arainvest accept the offer, VCP said it planned to swap its shares for Aracruz stock <ARCZ6.SA><ARA.N>.
'VCP believes the transaction described here will be advantageous to shareholders of both companies, creating a global leader in pulp and paper and reinforcing Brazil's position in a very competitive and globalized market,' the company said in a statement.
VCP shares jumped 5.3 percent to 38.47 reais in early trading at the Sao Paulo stock exchange, while Aracruz fell 3.1 percent to 10.18 reais.
(Reporting by Elzio Barreto; Editing by Lisa Von Ahn) Keywords: ARACRUZ VCP
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