Suzano Buys 15% Stake in Lenzing to Boost Market Presence

Suzano S.A. SUZ announced that it acquired a 15% stake in Lenzing LNZNF from its current majority stakeholder, B&C Group. This move will help Suzano gain proximity to new markets.
The deal was set at 230 million euros ($249 million). Suzano and B&C will form a long-term syndicate to hold a 52.25% stake in the Vienna-based cellulosic fibers supplier company. B&C will hold the majority of the stake (37.25%) and remain the controlling member of the new syndicate.
Under the deal, Suzano can acquire a further 15% stake in Lenzing from B&C until 2028.
Lenzing is a global supplier of premium cellulosic fibers for the textile and non-woven industry. This deal will further strengthen Lenzing's position as a global market leader for sustainable cellulosic fibers. SUZ aims to boost Lenzing's position with its established technology, product range and technical knowledge.
SUZ will gain from Lenzing's deep-rooted understanding of pulp production and cost excellence. The partnership will help Suzano  to strengthen its competitive position and global presence.
The transaction marks the continuation of Suzano's strategy to focus on investments, which will enlarge its addressable market in scalable and competitive business models. The investment also moves the company closer to end consumers.
Suzano reported annual net revenues of more than $7.6 billion in 2023. In the first quarter of 2024, the company reported net sales of $1.9 billion, down from the $2.2 billion reported in the prior-year quarter. The bottom line fell 95.8% year over year to 3 cents in the first quarter. The downside was due to seasonal effects on sales in the sector, and the recovery trend of international pulp prices and stable production costs.

Price Performance

Shares of Suzano have lost 3.7% in the past year against the industry's 35.9% growth.

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Zacks Rank & Other Stocks to Consider

SUZ currently flaunts a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the basic materials space are Ero Copper Corp. ERO, Ecolab Inc. ECL and ATI Inc. ATI. ERO sports a Zacks Rank #1 at present, and ECL and ATI have a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ero Copper's 2024 earnings is pegged at $1.66 per share, indicating year-over-year growth of 95%. The consensus estimate for 2024 earnings has moved 20.3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 53.9%. ERO shares have gained 9.5% in a year.
The Zacks Consensus Estimate for Ecolab's 2024 earnings is pegged at $6.59 per share, suggesting an increase of 26.5% from the prior year's reported number. It has an average trailing four-quarter earnings surprise of 1.3%. ECL shares have gained 34.5% in a year.
The Zacks Consensus Estimate for ATI's 2024 earnings is pegged at $2.41 per share. The Zacks Consensus Estimate for ATI's current-year earnings has been revised 3% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 8.3%. The company's shares have rallied 65.9% in the past year.

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