Cleanaway launches $2.52 billion bid for Australian recycling arm of Suez

Cleanaway launches $2.52 billion bid for Australian recycling arm of Suez

A proposed $2.52 billion transaction would see Cleanaway Waste Management (ASX: CWY) acquire the Australian recycling and recovery business of France's Suez Groupe (Suez R&R Australia) if all goes to plan.

However, as Suez is currently subject to a $17.4 billion takeover offer from another French company Veolia Environnement, Cleanaway still has a few hurdles it would need to overcome.

If the deal goes ahead, Cleanaway - one of Melbourne's Top Companies - will acquire Suez's Australian portfolio of infrastructure assets including a workforce of more than 2,000 employees, six operating landfills, 59 depot facilities and a fleet of more than 1,000 vehicles.

In CY20 Suez R&R Australia generated revenue of $1.412 million.

Cleanaway's proposed acquisition may be terminated by Suez if the Veolia tender offer is successful. However, if that happens the two parties have agreed Cleanaway will acquire a portfolio of strategic post collections assets in Sydney instead.

Those assets comprise two landfills and five transfer stations and would be acquired for $501 million.

"Suez's Australian Recycling and Recovery business has a high-quality network of assets across Australia that will accelerate the implementation of our Footprint 2025 strategy," Cleanaway executive chairman Mark Chellew said.

"The acquisition will deliver superior scale and increased operating leverage.

"We look forward to more than 2,000 of Suez's Australian employees joining the Cleanaway team in due course."

Should the transaction get the green light, Cleanaway will raise equity to fund the transaction but if that isn't successful it will have to pay Suez a $30 million break fee.

A $45 million break fee is also on the table if the transaction is not completed due to the Australian Competition and Consumer Commission (ACCC) blocking the deal.

On the flip side, if the Foreign Investment Review Board (FIRB) does not approve a pre-closing restructure of Suez's water business, the French multinational will have to pay Cleanaway a $30 million break fee. 

Cleanaway's bid for Suez R&R Australia is the latest big move for the waste management company after it announced Vik Bansal would step down from his role as CEO earlier this year.

Bansal delivered the group's first half FY21 results in February and remains available to assist the board during the leadership transition.

The former CEO's resignation came just four months after the Australian Financial Review published allegations that Bansal bullied and intimidated employees at Cleanaway.

According to the AFR, Bansal was investigated in June 2020 over accusations he led a "culture of bullying and harassment", with sources claiming he would swear at staff and exclude women from promotion opportunities.

Sources who spoke to the AFR also alleged the company's board, chaired by Mark Chellew, failed to probe Bansal's behaviour for several years.

Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.

Business News Australia

Get our daily business news

Sign up to our free email news updates.

 
Whitefox Recruitment founder Luke Hemmings making strides as a careers leader
Partner Content
After relocating his Canberra-founded company Whitefox Recruitment to the Gold Coast la...
Whitefox Recruitment
Advertisement

Related Stories

ASIC secures its first court win for greenwashing against US giant Vanguard

ASIC secures its first court win for greenwashing against US giant Vanguard

The Australian corporate watchdog has caught out one of the world&r...

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Medicinal cannabis group Althea shaves $1.5m from its cost base through staff cutbacks

Australian-founded medicinal cannabis company Althea Group (ASX: AG...

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Charter Hall snares 15pc stake in Hotel Property Investments for $97m from 360 Capital

Listed funds manager 360 Capital Group (ASX: TGP) has offloaded its...

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Lendlease gains approval for $1.7b transformation of Queen Victoria Market precinct

Australian development giant Lendlease Group (ASX: LLC) has been gr...