China companies vie for German waste management firm: sources

The company logo of China Everbright International Ltd is displayed on a glass door at its office in Hong Kong, China November 17, 2015. [Photo/Agencies]

At least three chinese State-owned enterprises are bidding for a german waste management company, underscoring china's desire to acquire advanced technology to tackle a growing refuse problem, people familiar with the matter told Reuters.

Chinese State-backed Beijing Enterprises Water Group Ltd, China Everbright International Ltd and Beijing Capital Group are among the suitors who have submitted initial bids for Energy from Waste (EEW), the people added.

It is Europe's market leader in energy-to-waste and valued at 1.5-2 billion euros ($1.6-$2.1 billion), they said.

If successful, the deal would mark China's biggest outbound M&A in the sector in about 16 years, according to Thomson Reuters data.

China had set a target to spend about $16 billion between 2013 and 2016 to improve sewage disposal and garbage treatment, according to domestic media reports.

Swedish buyout firm EQT put the company up for sale after taking full control of the waste-burning power producer, Reuters reported in September.

It is currently drafting a vendor due diligence report, reviewing the tentative offers and will soon shortlist several bidders, with a view to signing a deal in early 2016, the sources familiar with the process added.

Heavy Chinese interest in an overseas asset comes as the government struggles to cope with an acute environment and waste recycling problem.

China needs top notch waste management technology to convert the enormous amounts of refuse the world's most populous country generates. "EEW has state-of-the-art emissions control technology and also employs a very efficient garbage collection management system," one person familiar with the company said.

Waste treatment and recycling has emerged as one of China's biggest challenges as it tries to tackle pollution and ease pressure on its depleted and contaminated water and soil.

Rubbish headache

Government researchers have estimated that as much as 7 billion tons of waste is buried around China's major cities, and the capital Beijing is now surrounded by a belt of landfill sites.