Chinese firm buys New Zealand’s biggest waste management company for $ 800 m

Tuesday, 4 March 2014 01:17 - - {{hitsCtrl.values.hits}}

REUTERS: Beijing Capital Group will buy the biggest waste management firm in New Zealand from Australia’s Transpacific Industries Group Ltd. for almost $ 800 million dollars, enabling the Chinese state-owned company to acquire technology that could help combat chronic pollution. Transpacific’s New Zealand waste business specialises in environmentally friendly landfill methods, odour management and hazardous waste handling. Demand for such technology is growing in China as the Government launches a raft of measures to tackle choking pollution, which has become a politically sensitive issue. People with knowledge of the deal said Beijing Capital Group (BCG), which is owned by the Beijing municipal government, was keen on tapping Transpacific’s expertise over the long term, and had not bought the waste management unit for eventual re-sale. “The investment carries significant...mutual technical and commercial benefits,” BCG Chief Executive and Deputy Chairman Wang Hao said in a statement. The sale also advances Brisbane-based Transpacific’s push to exit non-core businesses and focus on its Australian waste management operations. Transpacific can now refinance its debt and resume paying dividends, the company said in a statement, adding that it expected the sale to be completed in June. Transpacific sold the unit to Beijing Capital Group for NZ$ 950 million ($ 798 million), the company added. In August, Transpacific sold its commercial vehicles business to US-based Penske Automotive Group for A$ 219 million ($ 195.97 million). The deal with BCG comes just over a year after Hong Kong’s family-owned Cheung Kong Infrastructure Holdings bought Envirowaste, New Zealand’s second largest waste management company behind Transpacific, for NZ$ 490 million. A source told Reuters last week that BCG had been up against three other bidders for the New Zealand business, including private equity giant Carlyle Group, a consortium involving investment manager Morrison & Co, two Maori tribes and infrastructure investor Infratil Ltd., and another unnamed bidder.