Suez SA has reached an agreement to sell its Australian business to Cleanaway Waste Management Ltd., with completion conditional on further talks about its own takeover by peer Veolia Environnement SA.
The French waste firm signed a deal to sell its recycling and recovery business in Australia to Melbourne-based Cleanaway for A$2.5 billion ($1.9 billion), the company said in a statement Tuesday. Under the terms, Suez can terminate the deal by May 6 if it reaches a takeover agreement with Veolia, Cleanaway said in an exchange filing.
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The arrangement leaves room for Suez to maneuver for its own fate after action in French courts by Veolia aimed at blocking a suite of Suez’s global divestments. Veolia bought almost 30% of Suez in October with a plan to absorb the whole company and create a new global leader in the sector.
“Suez continues to seek a friendly, negotiated solution with Veolia and is accordingly leaving the door open for negotiations with Veolia for a global agreement,“ the company said in its statement outlining the deal.
If the deal isn’t completed, Cleanaway will still acquire a portfolio of two landfills and five transfer stations in the Sydney region for A$501 million, the companies said.
If the deal set out does get done, it would make Melbourne-based Cleanaway among the largest waste treatment operators in Australia. It’s still currently searching for a new chief executive after longtime leader Vik Bansal announced plans to step down following an investigation into his workplace conduct.
Cleanaway also said it plans to raise new equity to partially fund the deal.
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