BRAZIL – Brazil’s top two board manufacturers, Duratex S.A. and Eucatex Group, have informed the general market that they have entered into a binding proposal involving the exchange of assets between the companies. The transaction is based on the amount of BRR 60 million.

Duratex will receive from Eucatex land and forest assets, located in Capão Bonito (SP), strategically close to the unit of Duratex in Itapetininga. This asset exchange is in synergy with Duratex's announcement of the resumption of operations of the Itapetininga plant, scheduled for April 2018.

The Eucatex Group will receive from Duratex facilities and equipment for the manufacture of thin fiberboard sheets (wet process) located in the City of Botucatu, State of São Paulo. This is an strategic acquisition as it is where Eucatex’s MDP and Laminated Flooring unit and most of it forest assets are already located. The transaction does not include the MDF panel line at Botucatu, which continues with Duratex and is in normal operation.

The supply of wood to this new production unit will come from owned and third-party forests, including those of Duratex, with which it will enter into a supply agreement for up to 7 years, which will enable the unit to operate at its full capacity of 200,000 m3/year.

The transaction is subject to approval by Brazil’s antitrust agency CADE (Conselho Administrativo de Defesa Econômica). While this approval is pending, the lines will remain under management of Duratex S.A.