Chile's CMPC says to buy Aracruz unit (Brazil) for $1.4 B

Chilean forestry group CMPC agreed to pay $1.4 billion for a unit of Brazilian giant Aracruz, a move that would give the acquirer access to the world's cheapest producing pulp market.
Santiago-based CMPC said in a regulatory filing late Tuesday that it had signed a memorandum of understanding with Aracruz to buy the Guaiba unit. Guaiba has pulp, forestry, paper and wood businesses that include a plant to process cellulose and another to produce paper. The deal also includes 212,000 hectares of land of which 60 percent is planted with eucalyptus trees.
The purchase underscores the cost advantages and high forestry potential that pulp companies in Brazil have relative to rivals in North America and Europe. Brazilian pulp makers are operating at full capacity and opening new factories, even as the global market is facing its worst downturn in six decades.
Shares of CMPC jumped 6.3 percent to 17,600 Chilean pesos ahead of the market opening on Wednesday. The stock has gained 12 percent in the 12 months ended on Sept. 22.