Shanks has agreed merger terms with Dutch recycling firm Van Gansewinkel (VGG).
The deal, announced in principle on 7 July, will be a reverse takeover by the UK’s Shanks, with the continental firm twice its size and valued at €440m (£380m).
It has now been confirmed that VGG shareholders will receive €482m in cash and share consideration, higher than the €306m originally announced.
Subject to Shanks and VGG shareholder approval and regulatory clearances, the deal is expected to be completed by December.
Shanks chief executive Peter Dilnot and chief financial officer Toby Woolrych will lead the combined group, while VGG’s head staff will support integration for a short period after the deal has been completed.
Dilnot said: “This is a transformational deal with a compelling industrial rationale that is fully aligned with our growth strategy.
“The combined business will benefit customers through the provision of a broader range of services across a larger geographic area and employees through the creation of a platform for growth.
“The merger has a clear strategic benefit for the Shanks Group, and the board believes that the resulting commercial opportunities and synergies will deliver attractive long-term financial returns that should significantly enhance shareholder value.”
The statement reveals that the board believes a merged company could achieve savings of around €40m in the third full financial year following the merger. It estimates that 30% of these savings would be delivered in the first year, 75% in the following year and 100% thereafter.
Nick Williamson, Ashurst corporate adviser, said:
“Shanks is a longstanding client of ours, and we most recently advised Shanks as it became the first UK company to issue green bonds in euros to retail investors.
”This is a very complex cross-border transaction requiring advice across multiple jurisdictions and practice areas within Ashurst.
”As a reverse takeover combined with a rights issue and a placing, as well as entry into new debt facilities, this was also all achieved on an accelerated timetable.”
In a interview (below) Dilnot was unsure about what the new group’s name would be.