7th Jul 2016 07:14
LONDON (Alliance News) - Waste management company Shanks Group PLC on Wednesday said it has entered into talks to merge with Netherlands-based waste collection and recycling company Van Gansewinkel Groep BV.
Shanks had flagged talks between the two companies in late May and on Thursday said it has now entered exclusive talks with Van Gansewinkel and its two largest shareholders on a deal which would value the Dutch company at EUR440.0 million.
Under the terms of the deal, Van Gansewinkel shareholders would get EUR306.0 million in cash and and the balance in shares in Shanks. After completion, Van Gansewinkel shareholders would own 29% of the combined company.
Shanks said the deal will create a leading waste-to-product business in the Benelux region. It added it would bring together complementary businesses, with Shanks strong in the construction and demolition segments and Van Gansewinkel holding a strong presence in the municipal waste collection sector.
The UK group added a number of synergies could be achieved under the deal, including cutting costs by optimising logistics routes and rationalising sites. The increased scale of the business would also help procurement capabilities, Shanks said.
"We are delighted to have reached agreement in principle with VGG on the terms of a proposed merger. This is a truly transformational deal for Shanks. Our two businesses are highly complementary and a combination would create a leading Benelux waste-to-product business, with enhanced geographic coverage, capabilities and technologies as well as significant synergy potential," said Shanks Chief Executive Peter Dilnot.
Shanks added trading in its current financial year, to the end of March 2017, has started well and is tracking slightly ahead of the company's expectations.
Shanks shares, which had been suspended when the talks with Van Gansewinkel were first reported in May, were down 12% to 71.24 pence after resuming trading.
By Sam Unsted; [email protected]; @SamUAtAlliance
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