PreZero, the environmental division of Germany-based Schwarz Group, a multinational retail group that operates grocery stores under the Lidl and Kaufland brands, and Paris-based environmental services firm Suez say they have signed an agreement to enter into exclusive negotiations for PreZero to acquire Suez‘s Recycling and Recovery operations in the Netherlands, Luxembourg, Germany and Poland. The deal would exclude Suez’s plastic recycling and hazardous waste treatment activities. The companies say they also have entered into a memorandum of understanding to explore possibilities to develop strategic partnerships and promote innovative waste management solutions to accelerate the development of the circular economy in Europe.
PreZero manages waste collection, sorting, processing and recycling activities in Germany as well as in other European countries and North America. The company employs more than 3,600 people at more than 90 locations. In recent years, PreZero has expanded its waste and recycling management activities through various acquisitions.
According to a news release from PreZero, Suez has leading positions in the Netherlands, Luxembourg, Germany and Poland that cover collection, sorting, processing and treatment of waste and recyclables. It handles a broad range of materials at 125 sites run by 6,700 employees. In 2019, Suez generated 1,110 million euros (about $1.3 billion) in sales and 100 million euros (about $118 million) in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) on a pro forma adjusted basis.
In a separate news release, Suez says the transaction would represent another major step in the delivery of its asset rotation plan under its Suez 2030 strategy, which aims at positioning the company as a global, agile, innovative and highly technological leader in environmental services.
PreZero says the transaction is an important step for its growth.
Thomas Kyriakis, CEO of PreZero, says, “With the contemplated acquisition of Suez‘s recycling and recovery businesses in the Netherlands, Luxembourg, Germany and Poland, we are further enhancing the waste stream cycles that we already cover today in order to improve waste and recycling management and reduce the consumption of natural resources. Municipal customers and our partners in commercial and industry likewise will benefit from us driving competition. At the same time, the Schwarz Group outlines its responsibility to establish a sustainable circular economy.“
“With the planned acquisition and the associated combination of both companies know-how, we create synergies and the basis for further growth,“ says Gerald Weiss, managing director of PreZero International. “By enhancing our service portfolio and expanding our location coverage, we create sustainable added value for our customers.“
The companies say the transaction is expected to be completed in the first quarter of 2021 and is subject to regulatory approval and customary closing conditions, including the consultation of employee representative bodies.
After completion of the transaction, PreZero says it will have a total of approximately 10,300 employees in Germany, Poland, the Netherlands, Belgium, Luxembourg, Austria, Italy and the USA.
Bertrand Camus, CEO of Suez, says, “This project marks a major step in the achievement of our Suez 2030 strategic plan, presented last October, which plans to concentrate our forces in France and in Europe, on the activities and geographies where we can deploy our most promising innovations to become the leader in environmental services. This transaction is part of our asset rotation program and values the quality of our business portfolio. I am very excited about the opportunity to accelerate the circular economy with our partners at Schwarz Group as part of the memorandum of understanding signed today. We are confident that, within PreZero, these activities and teams will continue to grow for the benefit of the environment.”
The Schwarz Group and Suez also will explore possibilities to develop strategic partnerships to accelerate the development of the circular economy. The two groups say they would bring deep and complementary skills in waste and recycling services.
Earlier this month, Paris-based Veolia says it made “a firm offer” to France-based utility firm Engie to acquire the 29.9 percent stake that company holds in Suez.
However, Suez has said its board of directors has reviewed Veolia‘s takeover bid and has labeled it a “hostile approach” that is “against the best interests of Suez and all its stakeholders, and in particular its shareholders, its employees and its clients.”
In a news release issued by Suez, the company says its board has concluded that “the overall structure of the transaction contemplated by Veolia is questionable and exposes Suez and its shareholders to a long period of disruption for the group, with a risk of a takeover on an unacceptable basis.”
Suez adds, “Veolia’s takeover project comes with major antitrust and regulatory issues in France and abroad.”