Indonesia’s APP close to buying Eldorado Brasil

Indonesia’s Asia Pulp & Paper Co. Ltd (APP) is in advanced talks to buy control of peer pulp maker Eldorado Brasil Celulose SA, which went up for sale after controlling shareholders Wesley and Joesley Batista got ensnared in Brazil’s worst corruption probe, two people familiar with the situation said on Sunday. It is said that APP submitted earlier this month a bid valuing Eldorado Brasil at about 15 billion reais ($4.8 billion). The Batista family’s holding company J&F Investimentos SA owns 81% of Eldorado Brasil.

SAO PAULO —Indonesia’s Asia Pulp & Paper Co. Ltd (APP) is in advanced talks to buy control of peer pulp maker Eldorado Brasil Celulose SA, which went up for sale after controlling shareholders Wesley and Joesley Batista got ensnared in Brazil’s worst corruption probe, two people familiar with the situation said on Sunday.

The people, who requested anonymity to discuss the matter freely, said APP submitted earlier this month a bid valuing Eldorado Brasil at about 15 billion reais ($ 4.8 billion). The Batista family’s holding company J& F Investimentos SA owns 81% of Eldorado Brasil.

Such a stake would cost APP between 6 billion reais and 7 billion reais, said the people, noting that the Indonesian company would fully assume Eldorado Brasil’s 8 billion reais in debt. While neither person said a deal is certain, both said that an announcement could come as early as this week.

In a statement, São Paulobased J&F declined to comment on the transaction, adding that “the sale process remains in due course.” Jakarta-based APP did not immediately respond to an e-mail seeking comment.

Eldorado is among the flagship assets J&F put up for sale after the two meat- packing tycoons agreed to pay a record- setting 10.3 billion-real fine for their role in corruption scandals that have hurt President Michel Temer’s administration. Fallout from the scandal forced the brothers to shed assets and refinance debt to honor that fine.

Buying Eldorado could help foreign pulp makers expand in Brazil, where lawmakers have discussed easing sales of land to foreign investors. Land in Brazil offers global pulp makers advantages, such as more- productive soil than Scandinavia and Chile.

Reuters reported on Aug. 4 that talks between J&F and Chilean pulp maker Empresas Copec SA for Eldorado sank due to price disagreements, and that three competing offers — including APP’s — emerged as a result. O Globo newspaper first reported the deal earlier in the day. —