Shanks, VGG get green light to merge

The board of directors for Shanks, a waste management and environmental services firm based in the United Kingdom, has announced that the company has received all necessary approvals from the relevant competition authorities in the Netherlands in relation to the proposed merger with Van Gansewinkel Groep B.V. (VGG), a Dutch recycling company. The proposed merger was first made public last May.

With the go ahead from the Dutch Competition Authority (ACM) and the approval of the Belgian competition authority in late January, the two companies say they can go through the merger, which both parties feel should be completed by early March.

Shanks says the completion is subject to, among other things, approval of a prospectus by the FCA (Financial Conduct Authority).

Following the completion of the deal the two companies say they will announce a new name of the combined company.

In a release, Peter Dilnot, Shanks’ Group CEO, says, “We are delighted to have cleared the final regulatory hurdle so that we can complete the transformational merger of Shanks and VGG. This strategic deal will bring two strong companies together to create a new international waste-to-product leader at the heart of the emerging circular economy. The combined group will operate across nine countries with unique capabilities and the scale, capability and expertise to grow profitably over the longer term.”

“This is an exciting time for both Shanks and VGG, and we look forward to creating a new company that delivers sustainable value for customers, shareholders and the communities we serve,” Dilnot adds.

The merger with VGG is wholly aligned with Shanks’ strategy to be a leading international waste-to-product company. The combined entity will be well positioned to meet the needs of the emerging circular economy and will have the scale, capability and expertise to deliver long term sustainable growth and attractive returns. The new business will be able to offer its customers an extensive range of recycling technologies and services.

VGG notes that the merger is the final piece in a process that the company has been working on for 2 ½ years. To complete the deal, VGG underwent a complex refinancing package, which it completed in 2015. Over that time, the company was able to reduce its debt by around €500 million (US$527 million), bringing it back to normal proportions.

Overhauling strategy, improving the organizational structure and investing heavily in equipment and recycling solutions then laid the foundations for an improvement in the company's results, VGG reports.

"Our staff has shown their adaptability and vitality in recent years and have succeeded in achieving the turnaround. Two thousand sixteen was a year of transformation, marked by a significant improvement in performance,” says Marc Zwaaneveld, VGG’s CEO.

“Following this approval from the ACM, we will now be shaping the merger with Shanks from a position of great confidence. The combined company has all the ingredients needed for a solid future as a connective player in the circular economy and as a market leader in recycling and waste-to-product solutions," Zwaaneveld continues.

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VGG, with about 4,350 employees, had net annual revenues of around €1 billion last year. The company has operations throughout the Benelux countries, and, through its subsidiaries Coolrec and Maltha, also operate in Germany, France, Portugal and Hungary.

Combined, the two companies will have around 250 different locations. A spokesman for Shanks says that both companies are in the two 3-4 waste providers in the Netherlands and Belgium. 

Shanks operates in three divisions: hazardous, commercial and municipal. It has operations in the Netherlands, Belgium, U.K. and Canada and employs around 3,500 people.