The companies said in a statement that the transaction would take 12 months to complete, and Paper Excellence, controlled by the owners of Indonesia's Asia Pulp & Paper Co Ltd, would fully assume Eldorado's debt of almost 8 billion reais.
A person with direct knowledge of the transaction said Brazilian pension funds that own 19 percent of Eldorado's equity were considering whether to sell their stakes. J&F owns 81 percent of the pulpmaker.
Eldorado's management will remain in place until regulatory approval has been secured, according to the source, who requested anonymity because he was not authorized to speak.
Reuters reported on Sunday that Asia Pulp & Paper had extended a proposal to acquire Eldorado for 15 billion reais.
Eldorado is among the flagship assets J&F put up for sale after brothers Joesley and Wesley Batista 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. As a result, the Batistas have had to shed assets and refinance debt.
J&F agreed to sell Havaianas flip-flop maker Alpargatas SA (>> Alpargatas SA) in July to a group led by investment firms of Brazil's most prominent banking families for $1.1 billion. Mexico's Grupo Lala SAV de CV (>> Grupo Lala SAB De CV) struck a deal to buy dairy company Vigor Alimentos SA in August.
Paper Excellence began operating its first cellulose plant in 2007 in Meadow Lake, Canada, and has since expanded by buying other plants in that country and Europe.
(Reporting by Tatiana Bautzer, Guillermo Parra-Bernal and Anthony Boadle; Editing by Lisa Von Ahn)
