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International energy and water company Abu Dhabi National Energy Company (Taqa) has signed a definitive agreement to acquire Sustainable Water Solutions Holding (SWS Holding) for AED1.7 billion (US$460 million).
Under the terms of the agreement, Taqa will acquire all the issued shares of SWS Holding, with 50% of the consideration to be paid upon closing and the remaining 50% to be paid one year after closing.
Taqa will make additional payments in 2024 based on net profits generated in 2023. The attractive terms of this strategic transaction are an extremely positive outcome for Taqa and its shareholders as it will have an impact on Taqa’s financial performance while allowing efficient use of shareholder capital to fund future growth.
Strong complementarity
SWS Holding is highly complementary to Taqa’s existing portfolio and will add approximately AED16 billion to Taqa’s existing regulated assets of approximately AED75 billion. This will enhance Taqa’s highly predictable and secure cash flow profile and its long-term earnings. The transaction is expected to generate significant synergies and create value for Taqa and its shareholders.
Announced in May 2023, Shenwanda Holdings aims to benefit the industry and the community by focusing on resource recovery and water recycling to provide sustainable water solutions.
The newly formed SWS Holding has acquired the Abu Dhabi Sustainable Water Solutions Company (ADSWS), formerly known as the Abu Dhabi Sewerage Services Company (ADSSC), which is responsible for the collection, treatment and reuse of all wastewater in the Emirate of Abu Dhabi. main entity.
Adding SWS Holding’s specialist solutions to Taqa’s comprehensive product portfolio will create a vertically integrated business with a strong ability to deliver high quality water treatment solutions, and a shared commitment to operational efficiency and superior customer service.
ADSWS will operate and benefit from the regulatory control established by the Abu Dhabi Department of Energy (DoE) to manage Taqa’s existing UAE transmission and distribution business.
pipeline network
ADSWS has a sewer pipeline network extending over 12,000 kilometers, and its 37 wholly-owned treatment plants have a sewage treatment capacity of approximately 1.3 million cubic meters per day, and hold 60% through two companies that own 4 sewage treatment plants in Abu Dhabi The stake is under the “Build, Own, Operate and Transfer” (BOOT) model.
Jasim Husain Thabet, Group CEO and Managing Director of Taqa, said: “With the support of our shareholders, the strategic acquisition of SWS Holding is an important step in Taqa’s accelerated growth agenda. Two years ago, we set out in our 2030 strategy growth targets, and we have been delivering on our commitments since then. This transaction is a logical extension of our regulated asset base into wastewater networks and treatment, which in Abu Dhabi is aligned with our existing The electricity and water transmission and distribution business is subject to the same regulatory structure and the same principles. The new business will provide a material boost to our regulated asset base and associated stable long-term earnings.”
“Effective water management will play a key role in reducing greenhouse gas emissions in the UAE. By combining recycled water management with Taqa’s desalination activities and our recycled water network, we can do more to support net zero by 2050 Target.”
Comprehensive advantage
Eng Ahmed Al Shamsi, Chief Executive Officer and Managing Director of SWS Holding, said: “As a national champion with high sustainability ambitions, the prospect of becoming part of Taqa is compelling, which will allow us Strengthen cooperation and provide improved sustainable water management services.Shen Wanda Holdings embarks on a journey with a strong commitment to provide sustainable water solutions that not only benefit our customers and local communities, but also help protect our planet and its ecosystem. We look forward to continuing on this path with Taqa.”
The transaction is expected to close this year, subject to the successful and timely completion of necessary transaction requirements, including obtaining regulatory and relevant third-party approvals. Taqa is 90.03% owned by Abu Dhabi Power Company (ADPower) and 7.30% by Multiply Group. — trade arab news agency
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