The agency informed authorities that the acquisition by Paper Excellence did not meet requirements for the purchase of land by foreigners
Incra (National Institute of Colonization and Agrarian Reform) concluded its administrative process in the case of the purchase of Eldorado Brasil Celulose by Paper Excellence. The body formalized the decision of its Board of Directors, which assessed that the operation met the requirements for land purchases by foreign companies.
On Wednesday (November 13, 2024), Incra published the order (read the PDF – 118 kB) which complies with the opinions of the AGU (General Attorney’s Office of the Union) and communicates to the CVM (Securities Commission), Jucesp (São Paulo Commercial Board) and the MPF (Federal Public Ministry) on the results of the analysis contrary to the completion of the business.
The organization’s board of directors decided that the purchase and sale contract signed between J&F and CA Investment, a subsidiary of Paper Excellence, required prior authorization from the National Congress and the institute itself due to Eldorado being the owner and tenant of properties that would be passed on to the foreign company.
Incra says that no authorization was issued for the procedure and, therefore, the contract would have violated the laws e in addition to the decree and from devices that establish limits and regulate the purchase or rental of properties by foreigners.
The legislation requires authorization from Congress in some cases, such as the acquisition or leasing of areas above 100 modules for indefinite exploration by foreign legal entities, requiring prior authorization from the Legislature. Eldorado’s properties, which have 14,464 hectares of land, exceed these limits.
Incra’s understanding followed the same opinions from the AGU (General Attorney’s Office of the Union) and the MPF (Federal Public Ministry) followed by the TRF-4 (Federal Regional Court of the 4th Region) in by judge Rogério Favreto, in July 2023, who suspended the process of transferring control of Eldorado.
Before the evaluation by Incra’s board of directors, another 3 Paper Excellence appeals had already been denied by lower levels of the organization in Mato Grosso do Sul.
DISPUTE FOR ELDORADO CELLULOSE
Eldorado is one of the largest cellulose producers in the country, with a manufacturing unit in Três Lagoas (MS) and a port terminal in the Port of Santos, from where it exports to 40 countries. It was founded in 2010 by the J&F Group, owned by brothers Joesley and Wesley Batista.
In 2017, J&F Investimentos signed a contract to sell 100% of the shares in Eldorado Celulose to Paper Excellence for R$15 billion. The transfer of 49.41% of Eldorado’s shares to the multinational was carried out, but the remainder of the agreement was not concluded.
The dispute between J&F and Paper Excellence began in 2018, when Paper Excellence’s 1-year contract to acquire 100% of Eldorado Celulose’s shares began to be discussed initially in the arbitration court and then also in court.
The arbitration process won the case for Paper Excellence in 2021, concluding that J&F had the obligation to sell 100% of Eldorado to the Indonesian company. The process, however, was suspended by the TRF-4 pending judgment of a popular action asking for the sale of Eldorado to be undone because Paper Excellence did not request prior authorizations from Congress and the required for the acquisition and leasing of land by foreigners.
