The Cleanaway Waste Management Ltd (ASX: CWY) share price is edging lower this morning.
At the time of writing, the waste management company's shares down almost 1% to $2.61.
Why is the Cleanaway share price edging lower?
Investors have been selling Cleanaway's shares this morning despite the release of an update on the proposed acquisition of assets from Suez Groupe.
According to the release, the company's previous agreement with Suez to acquire all of its Australian recycling and recovery business has now formally been terminated. However, Cleanaway has exercised its right to proceed with the binding Sydney Assets Acquisition agreement.
This will see the company acquire a portfolio of strategic post‐collection assets in Sydney from Suez Groupe for a total of $501 million.
The release explains that Cleanaway has secured new debt facilities that will enable the acquisition of these assets to be fully debt funded. The company intends to provide further information in relation to the proposed funding for the acquisition in due course.
What now?
The acquisition still remains to subject to a number of conditions. This includes a change of control of Suez S.A. occurring and various customary conditions including ACCC approval, no material adverse change, and the transfer of certain customer contracts.
Completion of the acquisition is expected to occur shortly before the completion of the takeover of Suez S.A. by Veolia.
Based on the current timeline, Cleanaway expects this will be in the second quarter of calendar year 2022. Which is approximately one year from now.
However, if the transaction between Suez and Veolia does not proceed by 31 December 2022, the agreed transaction between Suez and Cleanaway in respect of all of Suez's Australian recycling and recovery business will be re‐enlivened.
