The proposed merger by Shanks Group plc with Dutch and Belgian waste business the Van Gansewinkel Group (VGG) has moved closer after terms were agreed between the two parties. Completion is expected in December 2016.
In a financial announcement today (29 September) Shanks said: “Merger terms agreed between Shanks and VGG to form a leading waste-to-product business in the Benelux region, one of the most advanced recycling markets in the world.”
The deal will see VGG shareholders receive 482 million euros with the hope that there will be “pre-tax cost synergies” of 40 million euros in the third full year following completion.
And, Shanks is buying VGG when the company looks to be in a healthy way – the statement noted that “VGG is trading significantly ahead of budget and compared to management’s expectations”.
A new brand will be launched on completion and the combined group will be headed up by Peter Dilnot, Shanks chief executive.
Mr Dilnot said: “We are delighted to announce the merger of Shanks and VGG. This is a transformational deal with a compelling industrial rationale that is fully aligned with our growth strategy. The combined business will benefit customers through the provision of a broader range of services across a larger geographic area and employees through the creation of a platform for growth.
He added: The merger has a clear strategic benefit for the Shanks Group, and the Board believes that the resulting commercial opportunities and synergies will deliver attractive long term financial returns that should significantly enhance shareholder value.”
Shanks already has operations on the Continent in Belgium, the Netherlands and Luxembourg and these were described today by the company as “performing strongly”.
Completion of the deal will see Shanks strengthening its recycling role whereas in the UK it has been centring activities on PFI-type contracts, energy from waste and RDF exports.
Van Gansewinkel has recycling activities within its Benelux operations that include dealing with paper, cardboard, wood, plastics, metals and food waste. Recently, Van Gansewinkel said it was “constantly searching for new processing methods and improving its recycling lines. In 2015, we invested heavily in state-of-the art sorting lines in the Netherlands (Amsterdam) and Belgium (Puurs, Châtelet).”
Van Gansewinkel’s recycling business includes Coolrec, Maltha and Van Gansewinkel Minerals. Coolrec notes that it “is the market leader in the Benelux for WEEE recycling and occupies a top 3 position in Europe” while Maltha describes itself as the “largest recycler of packaging and sheet glass in Europe.” The company recycles more than 1 million tonnes of glass each year.