Bord na Móna in talks to buy Veolia waste firm

STATE-OWNED Bord na Móna has emerged as the preferred bidder to buy the waste management operations in Ireland of Paris-based environmental services group Veolia, writes CIARÁN HANCOCK, Business Affairs Correspondent.

It is understood that Bord Na Móna's waste management subsidiary, AES, which it acquired in 2007, has entered exclusive talks to buy Veolia's Irish waste subsidiary, which it has put up for sale.

Bord Na Móna is believed to have offered €50-€60 million for the business and trumped bids from local rivals Panda, Greenstar and One51. The sale process is being handled by AIB Corporate Finance.

If merged, the combined AES/Veolia business would have combined turnover of more than €100 million and would be the number two player in the waste market here behind Greenstar, which is owned by the energy and utility group NTR.

It is understood that Bord Na Móna is currently carrying out due diligence on Veolia's Irish waste business. Any deal is likely to be concluded in mid-December.

Veolia has more than 3,500 commercial and industrial customers here and handles more than 320,000 tonnes of waste collected and 98,000 tonnes of waste recycled a year.

Its latest filed accounts show it made a profit of €8 million on sales of €64 million in 2006. The company, which is based in Tallaght, employs 200 staff and had accumulated profits of €17.3 million at the end of 2006.

This is the latest consolidation within the Irish waste sector. AES was acquired by Bord na Móna, which traditionally sold peat for fuel generation, last year for €60 million. Founded in 2001, the company increased its turnover by 11 per cent last year to €50 million.

AES's domestic service is used by 60,000 homes across the midlands, and it has 5,000 commercial customers.

In August, Veolia, which has operations in a number of countries, announced its intention to dispose of €1.5 billion worth of subsidiaries by the end of 2009 as part of its "asset rotation".

The Irish waste business, which formerly traded as Onyx, is part of this plan. It is understood that the French company will retain its water and energy businesses here and will continue to operate the Luas light rail system in Dublin. Veolia employs more than 1,200 people in Ireland.