Suez’s $3.5 Billion Waste Unit Draws Interest From German Retail Tycoon

(Bloomberg) -- Suez SA’s planned sale of a continental European waste management business is attracting early interest from German retail tycoon Dieter Schwarz, people with knowledge of the matter said.

The billionaire’s Schwarz Group, which controls supermarket chains Lidl and Kaufland, is in the initial stages of weighing a potential deal, according to the people, who asked not to be identified because the information is private. The Suez unit, which includes operations in Germany and the Benelux countries, could fetch about 3 billion euros ($3.5 billion), Bloomberg News has reported.

Suez has been making preparations to invite bids for the business, and it could still opt to launch a formal auction process if it’s unable to reach an agreement with Schwarz Group, the people said.

A representative for Suez couldn’t immediately comment. Schwarz Group said in an emailed statement that it’s in contact with different market participants, declining to comment further.

Schwarz is Germany’s richest person with a net worth of about $24.4 billion, according to the Bloomberg Billionaires Index. An acquisition of the Suez business would mark his second major venture into the sector as the businessman seeks to diversify his empire. Schwarz Group-controlled GreenCycle bought Toensmeier Group, one of Germany’s largest waste management companies, in 2018.

Suez’s German and Benelux waste management operations contributed 1.6 billion euros of revenue last year, about 9% of the group total, according to a company presentation. A sale of the business could rank as the French utility’s biggest ever divestment, data compiled by Bloomberg show. Suez has also been seeking a buyer for its Swedish waste management business as part of a plan to sell peripheral businesses and reduce debt, people with knowledge of the matter have said.

Companies have announced $9.6 billion of acquisitions targeting the European utilities industry this year, up 52% from the same period in 2019, according to data compiled by Bloomberg. Dealmaking in the sector has bucked the broader fall in mergers and acquisitions globally this year amid the coronavirus pandemic.

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