Beijing Enterprises Expected to Buy German Waste-to-Energy Plants for $2 Billion
February 03 2016 - 5:30PM
Dow Jones News
FRANKFURT—China's Beijing Enterprises Holdings Ltd. has emerged
as the front-runner to acquire a German operator of waste-burning
power plants from private-equity firm EQT for around €1.8 billion
($2 billion), according to people familiar with the matter.
The potential deal would be the latest in a shopping spree by
Chinese companies and the largest Chinese acquisition of a German
company on record, trumping China National Chemical Corp.'s $1
billion purchase of machine maker KraussMaffei last month.
The target, EEW Energy from Waste, operates 19
waste-incineration plants that produce electricity, district heat
and steam for industrial use. The plants have an annual capacity to
turn around 4.9 million tons in garbage into 1,900 gigawatt hours
of electricity and 3,000 gigawatt hours of heat. EEW had revenue
of €539 million in 2014, the last year for which data is
available.
Chinese companies' appetite for acquisitions abroad hasn't
diminished despite a meltdown of the domestic stock market. Earlier
Wednesday, China National Chemical Corp., also known as ChemChina,
made a $43 billion offer for Switzerland's Syngenta . That is
already well above the $31 billion that Chinese companies spent on
acquisitions in Europe in all of last year, according to
Dealogic.
The interest from Chinese bidders highlights the country's
ambitions for gaining access to technologies in sectors deemed
crucial. In mid-January, Chinese appliance maker Qingdao Haier Co.
announced the $5.4 billion acquisition of the appliance business of
General Electric Co.
Dealing with a growing amount of garbage and feeding China's
energy hunger are also drivers for deals. In a 2012 report, the
World Bank said the amount of municipal solid waste is growing
fastest in China, which surpassed the U.S. as the world's largest
waste generator in 2004.
Along with Indonesia, China is seen as a top source of plastic
reaching the oceans. Both countries account for more than a third
of the plastic bottles, bags and other detritus washed out to sea,
an international research team led by the University of Georgia
said last year.
With EEW, BEH would strengthen its sewage and water-treatment
operations. The company is also active in the pipeline and gas
business and runs beer brewery Yanjing, China's third largest
brand.
Sweden's EQT bought EEW from German utility E.ON SE in a
two-step transaction. EEW struggled with overcapacities and
shortage of garbage supply when EQT took a 51% stake in March 2013.
EQT acquired the remaining 49% in May at an undisclosed price.
(END) Dow Jones Newswires
February 03, 2016 17:15 ET (22:15 GMT)
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