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EU clears Votorantim to take control of Aracruz

Brazilian conglomerate Votorantim Group won permission from EU regulators to take sole control of paper and pulp company Aracruz Celulose in a $1.7 billion deal.

The European Commission, executive arm of the 27-nation European Union, said in a statement that the deal would not impede competition as the merged entity would not restrict access to pulp given Votorantim's limited market presence.

Aracruz Celulose is currently jointly controlled by Arapar, Arainvest and Votorantim, which also has interests in cement and concrete, mining and metallurgy, concentrated orange juice, specialty chemicals and also in the financial sector.

Votorantim, through its affiliate VCP, said last year that it had signed an agreement to buy the 28% stake held in Aracruz by Arapar SA, a holding company for the Lorentzen group.

As part of the Aracruz shareholder agreement, VCP will also have to offer to buy a 28% stake from Arainvest Participacoes, the holding company for brothers Joseph and Moise Safra.

Should Arainvest accept the offer, VCP said it planned to swap its shares for Aracruz stock. (Reuters)