Cleanaway Benefits From Veolia-Suez Merger Agreement, Walking Away With Prized Waste Disposal Asset

We make no change to our AUD 1.95 per share fair value estimate for no-moat Cleanaway, having already incorporated the previously mooted acquisition of key Australian waste disposal assets from no-moat Suez into our financial estimates. As anticipated, Suez has consented to its acquisition by no-moat Veolia—agreeing to a price of EUR 20.50 per Suez share. As a result, Cleanaway’s proposed acquisition of Suez’s Australian operations in their entirety won’t proceed. Rather, the acquisition of key post-collection assets from Suez—including the prized Lucas Heights landfill located in Sydney’s south—will go ahead. With the deal anticipated to close in the second quarter of calendar year 2022, we factor earnings from the post-collection assets from fiscal 2023 onward.