Brazilian pulp and paper company Suzano is expanding its North America operations with the $110 million cash purchase of two Pactiv Evergreen mills, the companies announced Friday. The deal is expected to close in the fourth quarter, pending antitrust approvals.
The mills in Pine Bluff, Arkansas, and Waynesville, North Carolina, make liquid packaging board and cupstock for fresh beverage cartons, paper cups and other fiber-based food and beverage packaging. Together, they would add about 420,000 metric tons of integrated paperboard to Suzano’s annual production capacity, the company said.
Suzano, whose U.S. operations are headquartered in Fort Lauderdale, Florida, says this deal marks its entrance into the North American consumer and food service packaging segments. The company describes itself as the largest supplier of hardwood market pulp in North America.
“We are entering the North American market as a competitive producer of paperboard, taking on quality assets that are strategically well-located from an operational and logistical perspective, and opening new opportunities for growth,” said Fabio Almeida, executive vice president of paper and packaging at Suzano, in a statement.
Pactiv Evergreen reported that Suzano plans to offer employment to current workers at the two mills. “[W]e look forward to building a long-lasting and positive relationship with the teams at Pine Bluff and Waynesville, as well as the local communities around both facilities,” Almeida said.
Pactiv Evergreen expects to continue to benefit from the two mills’ production. In addition to the transfer of assets, Suzano signed a long-term supply deal with Pactiv Evergreen to provide liquid packaging board from the sites for Pactiv Evergreen’s converting business.
Pactiv Evergreen CEO Michael King said in a statement that the sale marks the end of a much-discussed strategic alternatives review process for Pine Bluff and Waynesville, which dates back to at least the end of 2022. The company has been restructuring to combine its beverage and food merchandising businesses and last year shuttered other facilities in North Carolina and Ohio.
Sources told sister publication Packaging Dive earlier this year that Pactiv Evergreen's decision to cease production at that Ohio facility was behind an 8-ounce carton shortage that emerged in fall 2023, which acutely impacted half-pint milk and juice supply for schools and prisons.
Separately, Pactiv Evergreen earlier this year announced a restructuring plan taking place over the next few years affecting about 10% of the company’s roughly 100-facility footprint.
The acquisition news comes as Suzano’s new CEO takes the helm. Beto Abreu started in the role July 1. He succeeds Walter Schalka, Suzano’s CEO of 11 years. In a July 1 announcement, Suzano said Abreu has “extensive experience in leading M&A transactions.”
Suzano also was in the news recently for reportedly seeking a takeover of International Paper, which itself had entered a deal to purchase British paper packaging company DS Smith. In late June, Suzano stated that it was officially backing down from pursuing an IP acquisition.
“As we expand into new markets and grow Suzano ... we will double down on investing in innovation and strengthening our strategic partnerships, both of which we regard as key to helping us plant a more sustainable future,” Abreu said in a statement.
Pactiv Evergreen anticipates recording a non-cash impairment charge between $320 million and $340 million in the third quarter. It expects to share updated guidance for fiscal year 2024. The company has not yet named a date for its second quarter earnings call.
Katie Pyzyk contributed reporting to this story.
