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Suzano makes strategic move into textile industry with Lenzing stake acquisition

The acquisition of a 15% stake in Lenzing marked Suzano's significant entry into the global textile market, leveraging Lenzing's expertise in sustainable pulp fibers and advanced technologies

Suzano, the world’s largest producer of eucalyptus pulp, has ventured into the global textile market by acquiring a 15% stake in Lenzing, an Austrian company known for its expertise in dissolving pulp and fabrics. This strategic investment marked Suzano’s significant entry into the textile industry.

Lenzing, a leader in producing textile fibers and nonwovens from pulp, reported revenues of 2.52 billion euros last year. The acquisition agreement, finalized on Tuesday, the 11th, involved Suzano paying 229.9 million euros (approximately R$ 1.3 billion) upon the closing of the transaction, anticipated in the last quarter of this year pending regulatory approvals. Suzano plans to finance the deal using its own funds.

As a result of this investment, Suzano will become one of Lenzing’s major shareholders, gaining the right to appoint two members to Lenzing’s 11-member board of directors. Additionally, Suzano holds an option to acquire an additional 15% stake in Lenzing by the end of 2028, potentially becoming the company’s largest shareholder. Currently, Lenzing is primarily controlled by the B&C foundation, which will retain a controlling stake of 37.25% following Suzano’s initial investment.

Marcelo Bacci, Suzano’s Chief Financial Officer, Investor Relations, and Legal Officer, commented on the strategic pricing and rationale behind the acquisition: “Suzano has always believed in this vertical but did not yet have a presence. And we believe that the competitiveness we have in fiber can be transferred to printing papers, tissue, and paperboard, and this can also be done in the textile vertical”.

Previously, Suzano had invested in Spinnova, a Finnish startup specializing in sustainable textile fibers, reflecting Suzano’s ongoing interest in expanding its presence in the textile industry. Lenzing operates nine factories globally and collaborates with Dexco in Brazil’s LD Celulose, producing dissolving pulp in the Triângulo Mineiro region.

The global market for pulp textile fibers, driven by sustainability and cost competitiveness compared to synthetic fibers, grew by 3% in 2023 to reach 7.5 million tons. Lenzing’s prominent position in this market, with brands like Tencel and advanced technologies, appealed to Suzano. “We had more than two years of discussions, and this ‘timid’ entry into Lenzing’s capital is intended to give Suzano time to learn more about the sector and decide on the next steps”, explained Bacci.

Suzano’s financial reporting will incorporate Lenzing’s results through the equity method, underscoring the strategic importance of this investment as the company continues to expand its footprint in sustainable materials and global markets.

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