The European Commission (EC) has cleared French recycling group Derichebourg Environnement’s acquisition of Germany’s Scholz, finding the transaction compatible with the internal market and the EEA agreement, Kallanish learns from an official note.
The Commission received notification of the proposed concentration on 30 June. Under the deal, Derichebourg Environnement, controlled by Daniel Derichebourg, will acquire sole control over Scholz Holding and Scholz Recycling and their subsidiaries, currently held by Hong Kong-based Chiho Renewable International Holding, through a share purchase.
“The European Commission has concluded that the notified operation falls within the scope of the Merger Regulation and of paragraph 5 (d) of the Commission Notice on a simplified treatment for certain concentrations under Council Regulation (EC) No 139/2004. (4). The European Commission has decided not to oppose the notified operation,” the note says.
In May, Fitch Ratings placed Derichebourg’s long-term issuer default rating and senior unsecured rating, both at BB+, on Rating Watch Negative. This reflects Fitch’s expectation that the acquisition of Scholz Recycling Group will push up gearing, with a longer deleveraging given Scholz’s weak profitability and the time required to integrate Derichebourg’s systems and practices.
Derichebourg expects scrap demand to strengthen in the second half of the year, driven by the introduction of tighter EU quotas and new customs duties in July. In its first-half earnings note covering the period ended 31 March, Derichebourg warns that a prolonged closure of the Strait of Hormuz could spread the current crisis to the broader economy (see Kallanish passim).
