(Bloomberg) -- Suzano SA shares surged the most in four years, while International Paper Co. plunged, after the Brazilian company said it would end its pursuit of the US paper giant.

International Paper, based in Memphis, Tennessee, fell as much as 11% on Thursday, the biggest drop since 2022. Suzano jumped as much as 16% in São Paulo.

Suzano was never able to draw International Paper into serious engagement and wasn’t willing to increase its offer further, the company said late Wednesday. 

“It has always been a condition of Suzano for the completion of this transaction that the engagement between the parties be based on private, confidential and amicable terms,” Suzano said. “As it was not possible to proceed in this manner, Suzano has decided to terminate the negotiations.”

The decision removes a complication to International Paper’s plan to acquire DS Smith Plc. That deal is expected to close in the fourth quarter, the companies said Tuesday.

A takeover would have enabled Suzano, the world’s largest pulp producer, to expand internationally and diversify operations into the more stable packaging sector.

The company had seen room to take on substantial debt as it considered the deal, people with direct knowledge of the matter previously told Bloomberg. Investors had responded negatively to a potential takeover, raising questions about Suzano’s ability to maintain its investment grade if it took on added debt.

The $1.75 billion in Suzano notes due 2029 gained 0.9% to above par on Thursday, with the interest investors demand to hold the bond falling below 6%. 

Suzano did not provide details on its maximum price offer in its statement. International Paper had rebuffed an initial offer of $42 per share, which would have valued the company at almost $15 billion, and people familiar with the matter had told Bloomberg the company was likely to reject any offer below the mark of $50 per share, or a total $17.3 billion.

--With assistance from Gerson Freitas Jr..

(Updates first two paragraphs with share prices, adds bond move in eighth paragraph.)

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