In October, IP announced it was exploring "strategic options" for its Global Cellulose Fibers (GCF) division, as it shifts its focus toward packaging. Morgan Stanley was hired to advise on the potential deal.

The GCF division produces fluff pulp--used in baby and adult diapers and feminine hygiene products--as well as dissolving pulp, a raw material for textiles, construction materials, paints, and coatings.

According to IP, the unit includes five plants in the United States, one in Canada, and two conversion facilities--one in the U.S. and another in Poland. In 2024, net sales for the unit fell 3% to $2.8 billion from $2.9 billion in the previous year.

"The fact that it's concentrated in a single region--North America--makes the operation attractive. Right now, however, the impact of the Trump factor on negotiations remains uncertain," said a source familiar with the talks. The U.S. president imposed a minimum 10% tariff on imports from all countries, including Brazil, as well as additional duties on roughly 60 countries with major trade imbalances, including China, India, and the European Union.

Some of these same companies are also reportedly evaluating Kimberly-Clark's tissue paper business, valued at $4 billion. According to Bloomberg, Suzano, RGE, and Indonesia-based Asia Pulp & Paper (APP) are among the interested parties.

Last week, Bloomberg reported that APP is seeking up to $2 billion in financing to support its bid. Despite the interest, the perception is that the larger size of the transaction could slow the process, particularly in the current geopolitical climate.

In 2023, Kimberly-Clark sold its Brazilian hygiene paper business to Suzano for $175 million. However, a global acquisition may not be a priority for the Brazilian firm at this time.

In December, Suzano's CEO, Beto Abreu, said the company would focus on smaller acquisitions that offer scale advantages--such as its deals with Pactiv Evergreen and Lenzing. That strategy gained traction following its failed $15 billion bid to acquire International Paper roughly a year ago.

Headquartered in Singapore, RGE has pulp and paper operations in Indonesia, China, and Brazil. In Brazil, it has been expanding its pulp production through Bracell, particularly in Mato Grosso do Sul. The company is pursuing two environmental permits for a $4 billion plant in the state, with a projected capacity of 2.8 million tonnes of pulp per year.

Bracell currently operates facilities in Camaçari (Bahia) and Lençóis Paulista (São Paulo), where it produces eucalyptus kraft pulp--used in various paper types, including tissue--and dissolving pulp.

Chile's CMPC is also ramping up pulp production in Brazil. With an investment of $4.6 billion, its new mill will be built in Rio Grande do Sul and will have an annual capacity of 2.5 million tonnes of eucalyptus pulp. The plant is expected to begin operations in the second quarter of 2029.

Suzano, RGE, and CMPC declined to comment. International Paper had not responded to requests by the time this article was published.