Veolia-Suez takeover: Why Cleanaway shares may feel the heat

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Summary

  • Cleanaway Waste Management Ltd announced that it had entered into a deal to take over Suez Group’s Australian recycling and recovery business.
  • The Australian waste management firm said that it had signed an agreement with Veolia Environnement for a takeover of Suez by Veolia.
  • On 6 April 2021, Cleanaway had provided agreement to purchase Suez’s Australian business.

Cleanaway Waste Management Ltd (ASX:CWY) on Tuesday announced that it had entered into a deal to take over Suez Group’s Australian recycling and recovery business. The Australian waste management firm said that it had signed an agreement with Veolia Environnement for a takeover of Suez by Veolia.

Source: © Stokkete | Megapixl.com

On 6 April 2021, Cleanaway had provided agreement to purchase Suez’s Australian business. It was noted that the proposed acquisition could be terminated in certain circumstances, including where there is an agreement in principle for a takeover of Suez.

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The assets comprised two landfills and five transfer stations. The acquisition would be done for A$501 million. Cleanaway now expects that the Suez R&R Acquisition would be terminated on or prior to 6 May 2021, and that the Sydney Assets Acquisition would proceed.

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Two key highlights of the acquisition:

  • The acquisition of Sydney Assets is subject to several conditions, which also includes ACCC approval.

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  • The acquisition also delivered Cleanaway an immediate post collections solution for the Sydney region to internalise its waste.

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Stock performance

The shares closed flat at A$2.47 on 12 April 2021, compared to the previous closing on 9 April 2021. Here’s how other recycling stocks settled on Monday - Pact Group Holdings Ltd (ASX:PGH), down 3.17 per cent; Bingo Industries Ltd (ASX:BIN), down 0.33 per cent, and Pro Pac Packaging Ltd (ASX:PPG), down 2.38 per cent. IGE Integrated Green Energy Solutions (ASX:IGE) and CLQ Clean Teq (ASX:CLQ) ended higher on Monday.

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