Suez takes over SembSita Pacific in Australia from Sembcorp Environment

French utility Suez Environnement has signed an agreement with Singapore-based Sembcorp Environment, a wholly-owned subsidiary of Sembcorp Industries, to purchase Sembcorp’s 40% stake in SembSita Pacific for A$485m ($347.2m).

Suez Environnement Asia, subsidiary of the French giant, already owned 60% stake in the Australian joint venture entity, which chiefly focuses on waste management.

The deal allows Suez to strengthen its portfolio through full integration of its water, waste and construction activities in Australia. The firm intends to develop cross-selling and extract operational synergies in the short-term.

Suez Environnement CEO Jean-Louis Chaussade said: "This transaction will allow Suez to integrate its whole portfolio of activities in Australia, enabling an acceleration of growth and business development momentum in a very promising market.

"This will also lead to the extraction of both operational and financial synergies. It illustrates our strategic ability to maximise our value creation from existing geographical strongholds.

"Following this acquisition, the financial flexibility of the Group remains strong and keeps SUEZ ready to seize new development opportunities."

Divestment of the assets, on the other hand, will allow Sembcorp to refocus its investments for core strategic business units.

Sembcorp Industries Group president and CEO Tang Kin Fei said: "Proceeds from its sale will provide us with additional resources to invest in businesses and markets with high growth potential, in line with our focus on the energy and water sectors."

The deal, which awaits approval from the Foreign Investment Review Board in Australia, is likely to be completed by year end.