Beijing Capital Group today emerged as the winner of a
four-horse race for ownership of Waste Management after
writing a $950 million cheque for the former New Zealand
share market favourite.
The purchase, which is yet to be approved by the Overseas
Investment Office, is the biggest acquisition of a New
Zealand-based business by a Chinese entity since Haier
Electronics paid $927m for the remaining 80 per cent of
Fisher & Paykel Appliances it did not already own in
In a statement today, Australia's Transpacific Industries
said it had agreed to sell its New Zealand business to
Beijing Capital, which is owned by the Beijing Municipal
Competition between the four contenders - Beijing Capital,
private equity company Carlyle Group, funds associated with
Australian infrastructure investor Macquarie, and a syndicate
of New Zealand investors that included NZX-listed NZX-listed
Infratil, was close.
In the end, Beijing Capital won, both in terms of the price
and in terms, according to one source close to the deal. He
said Beijing Capital's interest was more strategic rather
than financial, as it would offer the company - which has
extensive water and waste water treatment investments in
China - access to Waste Management's environmental and truck
About 20 parties had expressed an interest in Waste
Management during the sale process, which started last year.
The previously NZX-listed Waste Management was highly
profitable and very popular with investors before it was
taken over by Transpacific for $870m in 2006.
Proceeds from the sale will allow the once heavily indebted
TPI to redeem preference shares, refinance its syndicated
debt facility and fund future investments with a strong
The process of selling the New Zealand operation went down a
so-called "dual track", with a trade sale being actively
weighed up against the option of an initial public offer and
float. A trade sale was always seen as the most likely
There are just two main players in the New Zealand refuse
collection and landfill business - Waste Management and its
much smaller competitor, Envirowaste.
Managing director Tom Nickels said Beijing Capital was buying
at a time when the company was seeing sustained growth -
driven mostly by the Auckland and Christchurch regions.
He said it was business as usual in terms of the makeup of
the company's management.
"We are very pleased and looking forward to the future and we
know Beijing Capital see it the same way," Tom Nickels said
in telephone interview from Hong Kong.
"Beijing Capital will bring substantial investment in the
company for plant and equipment," he said.
"On the intellectual property side, Beijing Capital see the
acquisition as an opportunity to gain New Zealand expertise
in the environmental space," he said.
Beijing Capital is in in the top 500 of the country's trading
enterprises. By the end of 2013, it had total assets and
revenues exceeding US$21 billion and US$3.7b, respectively.
Completion of its purchase of Waste Management is expected to
occur by the end of June this year, subject to Overseas
Investment Office and Chinese regulatory approvals.
- By Jamie Gray, APNZ business reporter