KKR Acquires Majority of DSD Shares

Kholberg Kravis Roberts announced that more than 95 percent of the shareholders of Duales System Deutschland AG have accepted the U.S. private equity firm’s offer. DSD is market leader for the collection and recycling of used packaging in Germany.

The company was founded in 1990 as a self-help organization by industry and trade in order to exempt themselves from the individual take-back and recycling obligations prescribed by the German Packaging Ordinance.

The ordinance which came into force in 1991 obliges manufacturers to prevent packaging wherever possible, and to take back and recycle the packaging they have circulated on the market.

The Dual System organizes the collection, sorting and recycling of packaging on a nationwide basis in Germany. Since it started operation, the company has collected for recycling around 57 million metric tons of packaging.

KKR expects to receive regulatory approval for the purchase by Jan. 13, 2005. DSD belonged to about 550 companies, including Metro AG and Henkel KGaA.

According to published reports KKR’s project manager Reinhard Gorenflos said the private equity company planned to list DSD in three to five years and expand the company's services. Additional business areas will include setting up a clearing system for Germany's deposit system for beverage containers and expanding DSD system of packaging collection beyond Germany's borders.