Secondary Marketplace

Oct 1, 2001

VCP Buys Stake in Aracruz Brazilian pulp and paper producer Votorantim Celulose e Papel (VCP), part of the Votorantim conglomerate, may have taken the first step toward a merger with Aracruz Celulose. The company is paying $370 million in cash for a stake in Latin America's largest pulp exporter. The deal was made in support of VCP's growth strategy. It already owns two wood pulp plants and three paper plants in Brazil and currently has the capacity for producing 800,000 metric tons of pulp a year. The addition of Aracruz, which currently produces 1.3 million metric tons a year and may have two million tons of capacity in a year, will eventually turn their combined pulp production into one of the world's largest. In early October, VCP acquired Mondi Internacional's 12.3% stake in Aracruz, and 28% of the company's voting shares. The deal is expected to close at the...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management