SAO PAULO (Reuters) -Brazilian pulp maker Suzano will finance its $1.73 billion acquisition of a 51% stake in Kimberly-Clark's international tissue business from cash reserves without needing additional financing, executives said on Thursday.
CEO Beto Abreu told Reuters the deal, announced on Thursday, will have an "almost imperceptible" impact on the company's debt levels. Chief Financial Officer Marcos Assumpcao said Suzano has sufficient cash reserves to complete the transaction without debt.
Shares in Suzano were up 6.5%, making it the biggest gainer in Brazil's benchmark stock index Bovespa, which fell 0.3% at around 3 p.m. local time (1800 GMT).
Suzano expects to close the deal by mid-2026. The company will also have the option to purchase Kimberly-Clark's remaining ownership interest, starting three years after the closing without expiration.
Abreu said Suzano chose to structure the deal as a joint venture rather than outright acquisition to reduce risks, avoid taking on debt and combine strengths with Kimberly-Clark.
The joint venture will be incorporated in the Netherlands and will include 22 manufacturing facilities across Europe, Asia, Middle East, South and Central America, Africa and Oceania.
The venture's leaders will be based in Europe and Suzano plans to focus now on developing its management structure, Abreu said.
Suzano plans to pause acquisitions while it concentrates on optimizing existing business operations, he said.
Itau BBA said that the joint venture structure reduces Suzano's execution risks in different geographies.
JP Morgan said the joint venture will enable Suzano to scale, becoming the eighth-largest global tissue producer.
(Reporting by Luciana Magalhaes; Editing by Kylie Madry and Cynthia Osterman)
