SUEZ has signed an agreement to buy out Sembcorp’s 40% minority interest in the Sembsita Pacific joint venture for Aus$485 million.
A statement from SUEZ, formerly SITA, said that transaction represents an opportunity for it “to accelerate its development through the full integration of its water, waste, oil and gas activities in Australia”. At the same time, the buyout allows Sembcorp “to refocus its investments on core strategic businesses”.
The SUEZ-Sembcorp joint venture has grown since its inception in 2000 to service 56,000 commercial and industrial clients, and provide roadside bin collections to 3.7 million residents across Australia weekly. It is the country’s second-largest waste-management business behind Transpacific Cleanaway.
“This transaction will allow SUEZ to integrate its whole portfolio of activities in Australia, enabling an acceleration of growth and business development momentum in a very promising market,” said Jean-Louis Chaussade, CEO of SUEZ. “This will also lead to the extraction of both operational and financial synergies. It illustrates our strategic ability to maximize our value creation from existing geographical strongholds.”
Additional acquisitions could also be on the agenda for SUEZ, as Mr Chaussade added that the group retains strong financial flexibility preparing it “to seize new development opportunities”.
The transaction is subject to Foreign Investment Review Board approval in Australia, and is expected to be completed by the end of 2015.