The sale, at 1.4 billion (1,400 million) includes all of WRG's waste disposal and municipal activities as well as the Allington energy from waste plant but excludes its landfill gas operations which are run in a separate waste-to-energy business. While the sale is subject to competition clearance, the transaction is expected to be completed by December this year.
The sale will mean that Focsa will become one of the largest businesses in the waste management sector in the UK. It follows hard on the heels of the acquisition by Veolia Environmental of Cleanaway which was announced earlier this month.
Terra Firma
The sale of WRG to FCC (Fomento de Construcciones y Contratas) has been agreed by investment firm Terra Firma which bought WRG in 2003.
Guy Hands, chief executive of Terra Firma, said: “In 2003, we identified Waste Recycling Group as an opportunity to participate in the development of the UK waste industry, which was undergoing radical change due to stricter regulation and the greater need to develop the infrastructure that will provide the future alternatives to landfill assets. Today, the business is transformed into a leader in its sector with a strategic and operational discipline. I am delighted that we have found new owners for the business who will invest further in its exciting prospects.”
Jim Meredith, chief executive of Waste Recycling Group, said: “Since Terra Firma financed the purchase of WRG in August 2003, the business has been transformed to become one of the UK’s leading waste management and energy recovery companies. It handles approximately 13 million tonnes of household, commercial and industrial waste each year and operates facilities for the reception, recycling and disposal of waste throughout the UK, including a network of waste transfer and recycling centres and a regional network of operating landfill sites. It manages nearly 70 civic amenity sites on behalf of local authorities for use by the general public.
“This has been achieved with the support of Terra Firma, who have worked with us to deliver a number of strategic and operational initiatives to meet our customers’ requirements. Under Terra Firma’s ownership, WRG has invested 450 million in developing waste treatment facilities for local authorities and trade customers, including the Allington incinerator in Kent, and made charitable donations of approximately 10 million on average per year under the landfill tax credit scheme, as part of our belief that we have a responsibility to the communities we serve.”
Employment rights
Mr Meredith added: “I am delighted that for the next stage in our development we will have the best possible strategic partners in FCC, with more than 100 years of experience and a leadership position in the Spanish waste management business, who have committed to maintain the existing employment rights of WRG’s staff.”
Rafael Montes, chief executive of FCC, said: “We are delighted with the acquisition of WRG. In our new Strategic Plan approved by our Board in April 2005, and supported by FCC’s major shareholder, Esther Koplowitz, we identified the UK waste management sector as one of our key priorities for growth. We have been present in this market for more than 15 years through our subsidiary Focsa.
Outstanding
“Through the acquisition of WRG, and with the support of its outstanding management team, we will become one of the leading UK waste management operators. Our ambition is to become a European leader in the waste management sector. With the acquisition of WRG, added to our leading presence in Spain, Portugal, and Central and Eastern Europe, we believe we are achieving this goal.”
Waste Recycling Group Ltd is one of the UK’s leading waste management and energy recovery companies and handles approximately 13 million tonnes of household, commercial and industrial waste each year. The company operates facilities for the reception, recycling and disposal of waste, including a network of waste transfer and recycling centres and a regional network of operating landfill sites, and manages nearly 70 civic amenity sites of behalf of local authorities for use by the general public.
The businesses have been changed since their acquisition by Terra Firma through a number initiatives including:
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a focus on landfill void optimisation
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a major investment programme totalling 450 million
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greater efficiency in their organisational structure
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the development of a market leading incineration programme with the Alllington incinerator with 500,000 tonnes per year of capacity being at the cornerstone of this developmen;
- the development of WRG as a major within the waste PFI market
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and the creation of the UK’s largest waste to energy company.
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