Brazil's J&F, Paper Excellence agree to settlement over failed unit sale

By Luciana Magalhaes

SAO PAULO, May 14 (Reuters) - Brazil's J&F Investimentos and Canada's Paper Excellence have settled a seven-year-old dispute with a deal that calls for J&F to pay $2.7 billion and reacquire a pulp company it contracted to sell to Paper Excellence but did not fully release, a source familiar with the negotiations said on Wednesday.

The $2.7 billion payment was expected to be made by the end of Thursday by the Batista family, which controls J&F, the source said.

The agreement was first reported by local newspaper O Globo and confirmed by Reuters. Both J&F and Paper Excellence declined to comment.

J&F agreed to sell pulp maker Eldorado Celulose to Paper Excellence in 2017 for 15 billion reais ($2.66 billion).

Paper Excellence made an initial payment of about $1.1 billion for about 49% of Eldorado, with the remaining balance to be settled in up to 12 months.

The money was put into escrow but the Batista family refused to proceed with the transfer of the remainder, the source said.

Paper Excellence accused the Batista family of blocking the purchase.

Paper Excellence sought to enforce the original purchase agreement and secure the remaining stake in Eldorado Celulose through action in international courts.

In 2021, Paper Excellence secured a victory before a Brazilian arbitration tribunal, which ordered J&F to complete the transaction. J&F fought that move and left the companies at an impasse until the settlement, under which J&F was to reacquire the 49% stake in Eldorado.

($1 = 5.6406 reais)