(Adds details on a possible deal)
SAO PAULO, March 8 (Reuters) - Brazilian pulp producers Fibria Celulose SA and Suzano Papel e Celulose SA are close to announcing a tie-up, newspaper Valor Economico reported on Thursday.
A report on the newspaper's website said Paulo Rabello de Castro, president of state development bank BNDES, which is a key shareholder in both companies, confirmed the ongoing talks, saying, "We have been working to bring together these two giants."
BNDES, which owns 29 percent of Fibria and 7 percent of Suzano, supports a merger between the two.
According to the paper, which cited sources close to the companies, Suzano shareholders want to acquire Fibria, and would buy out most of the 29.5 percent stake that industrial conglomerate Votorantim Participações SA has in the company.
But Suzano is structuring an offer to Votorantim in a way that avoids triggering a poison pill in Fibria´s bylaws, the paper added, without naming the sources. If Votorantim sells a stake higher than 25 percent, there is a mandatory offering to all shareholders.
Shares of both companies rose about 5 percent in early afternoon trading in Sao Paulo following the report.
Contacted by Reuters, representatives for Fibria, Suzano and Votorantim did not immediately comment on the report. (Reporting by Tatiana Bautzer Editing by Chizu Nomiyama and Frances Kerry)