Sembcorp Acquires 100% Equity Interest in Veolia ES Singapore
Sembcorp Subsidiary Acquires 100% Equity Interest in Veolia ES Singapore and Public Cleaning Business of Veolia ES Singapore Industrial
Sembcorp drives circular economy and recycling momentum as it grows its environmental business in Singapore
Sembcorp Industries (Sembcorp) announced that it has, through its wholly owned subsidiary SembWaste, entered into a sale and purchase agreement with Veolia Environmental Services Asia to acquire 100% equity interest in Veolia ES Singapore (VESS) and the public cleaning business of Veolia ES Singapore Industrial (VESSI) for approximately S$28 million. Completion of the deal is subject to conditions precedent including regulatory approvals.
The businesses to be acquired hold contracts for public and commercial waste and recyclable collections covering recovery and recycling, public and commercial cleaning services, as well as associated properties which include a materials recovery facility.
This acquisition is in line with Sembcorp’s strategy of deepening its presence as an integrated energy and urban solutions player providing green and more efficient solutions to enable sustainable development in its key markets. Committed to supporting Singapore’s move towards a circular economy and a zero waste nation, the acquisition will further strengthen Sembcorp’s waste management and recycling business as the nation’s premier integrated environmental services provider.
By joining the dots along the entire waste management value chain from waste collection and public cleaning to materials recovery and turning waste into energy, this acquisition will help to strengthen Sembcorp’s strategy of supporting sustainable development with its integrated solutions.
Neo Hong Keat, Senior Vice President (Waste Management), Sembcorp Industries, said, “Sustainability needs scale in the environmental business. For instance, after the acquisition, SembWaste’s fleet of vehicles would have doubled to close to 400. Such scale will enable the business to invest in a more efficient trucking fleet using cleaner fuels. In addition, we would also be better placed to move towards automation as well as skills upgrading for a fast-changing industry that is critical to the sustainability ecosystem in Singapore.”
The consideration amount was arrived at after taking into account the earnings, book value of the business and existing contract values. The consideration will be fully paid in cash and internally funded.
This transaction is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp for the financial year ending December 31, 2020.
