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Waste and recycling business to be sold for £4.2bn to new company

20 March 2020

Pennon Group has agreed to sell its Viridor waste and recycling service provider to Planets UK Bidco for a sum of £4.2bn.

The deal, announced yesterday by Business Green, is said to be one of the largest in the UK waste and recycling sector in recent years.

Planets UK Bidco is a new business created through investment funds and the acquisition is expected to be completed by the summer.

It includes the Viridor waste management and waste-to-energy contracts and facilities and will see Pennon Group focus fully on the water services side of its business.

At present, the group owns South West Water and has a major stake in Pennon Water Services.

Viridor is said to hold waste and recycling service contracts with approximately 150 local authorities throughout England, Scotland and Wales, in addition to its waste-to-energy operations.

In addition to providing waste and recycling services to blue chip companies, the company also announced a £65m project in the Bristol area last year for the recycling of plastic polymers.

Pennon Group said the sale was in its shareholders' best interests and the funds would be used to reduce borrowings, increase dividends and explore other opportunities in the future.

The sale follows a review of its business operations, the results of which were published last September.

With the Viridor sale involving a £3.7bn payment, its new owner has also agreed to take on £500m in debt, including £300m in leases and £200m of liabilities, attributed mainly to its landfill operations.

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