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Suez in talks for sale of recycling and recovery unit to PreZero
Posted on Wednesday, 16 September 2020 10:02
French utility firm Suez has entered exclusive discussions over the potential sale of its recycling and recovery operations.
The company said it is in talks with PreZero, the environmental division of Schwarz Group, about the possible deal, which would give the target an enterprise value of EUR 1.10 billion.
Under the terms of the transaction being proposed, the operations being offloaded would be in the Netherlands, Luxembourg, Germany and Poland and exclude the firm’s plastic recycling and hazardous waste treatment activities.
Suez said the discussions mean it has achieved about 40.0 per cent of the asset rotation target which it announced in October of last year, in line with its Suez 2030 strategic plan.
Completion of the deal is expected to follow in the first quarter of 2021.
While announcing the negotiations, Suez said it had entered into a memorandum of understanding to explore possible strategic partnerships which would promote innovative waste management solutions aimed at accelerating the development of the European circular economy.
Suez has itself recently been named as a potential target after Veolia Environnement unveiled plans to acquire a 29.9 per cent stake in the company from Engie in August.
The suitor said it would pay EUR 15.50 per share for the business, thereby valuing the deal at EUR 2.91 billion.
It also noted that if its bid is successful, it intends to launch a takeover approach for the remainder of Suez.
For its part, the prospective target has rejected the approach, which it said is unsolicited, and is considering alternative courses of action.
Zephyr, the M&A database published by Bureau van Dijk, shows that Veolia’s bid for the 29.9 per cent shareholding is the fourth-largest deal targeting a utilities company to have been announced worldwide during 2020 to date.
© Zephus Ltd