Chinese firm to complete takeover of Urbaser

Waste management firm Urbaser is to be sold to a Chinese-controlled investment firm, its owners have confirmed. 

Chinese firm to complete takeover of Urbaser
Urbaser Balfour Beatty's Javelin Park incinerator in Gloucestershire is part of a a £500-million, 25-year residual waste treatment contract
Actividades de Construcción y Servicios (Grupo ACS), the Spanish construction and services firm that owns Urbaser, has confirmed that it has reached an agreement with Firion Investments, a company ‘controlled by a Chinese group’, for the sale of 100 per cent of its stake in the company.

The sale was confirmed in a letter to the Spanish National Securities Market Commission, written on Monday (26 September) by José Luis del Valle Pérez, Board Member and Secretary General of ACS.

Urbaser is the environmental services arm of ACS, for which Florentino Perez, President of Real Madrid, has been President and CEO since its foundation in 1997.

The firm has collection activities on four continents (Europe, South America, Africa and Asia) and in 2014 reported revenue of €1.7 billion (£1.4 billion).

In the UK it is currently part of the Urbaser Balfour Beatty consortium that is developing the controversial Javelin Park incinerator in Gloucestershire as well as having waste treatment contracts in Essex, a recycling contract in Bournemouth and a waste services deal in Burnley.  

Chinese firm to complete takeover of UrbaserFirion will pay between €1.16-1.40 billion (£1.00-£1.21 billion) for the firm, with its full enterprise value – between €2.21-€2.45 billion (£1.91- 2.12 billion) – set ‘depending on certain future parameters’.

Urbaser will achieve a capital gain of between €325-560 million (£280-483 million) from the sale, which ‘is subject to customary approvals in this type of operation’.

Chinese interest in waste increasing

According to the stock exchange listing for Firion Investments, it is indirectly controlled by Huayu, a green industry fund in which Jiangsu Dagang Ltd, a developer of business parks, and China Tianying Inc., principally engaged in municipal solid waste incineration, have stakes.

ACS put Urbaser up for sale last year as it sought to reduce its net debt (which, by June, it had cut by 70 per cent in the past five years to €3.74 million) and simplify the group’s business portfolio. China Tianying was reported by the Spanish press to be in ‘advanced negotiations’ with ACS for the purchase of Urbaser in June, with SUEZ Environnement also thought to be interested before withdrawing from the bidding.

Chinese firms now seem to be taking more of an interest in European waste management firms. In March it was reported that a Chinese state-backed company was leading the chase to complete a £1 billion takeover of Biffa, which has instead decided to float on the stock market.

More information about Urbaser can be found on the firm’s website.

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