Suzano commits to dissolve Fibria's exclusive sales agreement with Klabin and transfer assets and business in Europe to Klabin.
The European Commission (EC) approved the acquisition of Brazil's pulp manufacturer Fibria by Suzano pursuant to the EU Merger Regulation. The competition authority reports that the decision is conditional on Suzano's full compliance with the commitments offered by it.
The Commission investigated concerns under competition law that the proposed acquisition would significantly reduce the level of competition in the market for bleached eucalyptus kraft (BEK) pulp. In particular, the merged entity would combine the two largest producers worldwide and therefore be three to four times larger than its next competitor in terms of size.
In order to eliminate the competition concerns raised by the EC, Suzano offered to erminate the supply and sales agreement concluded between Fibria and Klabin and transfer all assets and employees required to enable Klabin to independently sell eucalyptus pulp in the European Economic Area.
According to the EC, these commitments would reduce the merged entity's total capacity and sales and facilitate Klabin's entry into the EEA market as a new competitor.
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This article is part of our coverage on the Suzano-Fibria-deal. To stay current on news and reports from the pulp market, check our website or follow us on Facebook and Twitter.
