Suez to buy Sembcorp Industries' stake in SembSita Pacific

French utility company Suez Environnement has signed an agreement with Singaporean company Sembcorp Industries — an energy, water and marine group — to purchase the latter’s 40% stake in SembSita Pacific for $485 million.

Since 2000, Suez and Sembcorp have developed a partnership which resulted in the growth of SembSita Pacific — an investment holding entity for an integrated waste management business in Australia. With more than 56,000 commercial and industrial clients, and 3.7 million people supplied with services in the major cities, it leads the Australian waste recovery market through advanced resource recovery treatment and mechanical biological treatment.

The new transaction represents an opportunity for Suez to fully integrate its water, waste and oil and gas activities in Australia, while enabling Sembcorp to refocus its investments on core strategic businesses. The transaction is financially accretive for Suez and is compliant with the company’s selective financial investment criteria.

“This transaction will allow Suez to integrate its whole portfolio of activities in Australia, enabling an acceleration of growth and business development momentum in a very promising market,” said Suez CEO Jean-Louis Chaussade. “This will also lead to the extraction of both operational and financial synergies.

“It illustrates our strategic ability to maximise our value creation from existing geographical strongholds,” Chaussade continued. “Following this acquisition, the financial flexibility of the group remains strong and keeps Suez ready to seize new development opportunities.”

Subject to Foreign Investment Review Board approval in Australia, the transaction is expected to be completed by the fourth quarter of 2015.

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