Germany: Suez’s $3.5 Billion Waste Unit draws interest from Schwarz Group

The Schwarz Group, which controls Discount Retail Chain Lidl and Supermarket 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 waste sector. Schwarz Group-controlled PreZero bought Toensmeier Group, one of Germany’s largest waste management companies, in 2018. The Schwarz strategy to vertically integrate retail related businesses within their group adds additional value to the group. In 2019 PreZero and Schwarz Produktion (producing FMCG products such as chocolate, bake-off bread, water, icecream) generated a revenue of US $ 0.7 billion (EUR 0.6B).

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.

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