EQT sells waste-to-energy business for €1.4bn

The Swedish firm will exit EEW Energy from Waste to Beijing Enterprises Holding, one of three Chinese buyers said to have been vying, in addition to Macquarie, for the German company.

Stockholm-based EQT has agreed to sell EEW Energy from Waste (EEW) to Beijing Enterprises Holding for €1,438 million, concluding an auction process said to have involved a handful of Asian bidders.

The transaction, which according to EQT represents the largest Chinese direct investment in a German company to date, remains subject to clearance by the German authorities. It is expected to complete by the end of this month.

The exit comes less than three years after the fund manager acquired 51 percent of the business from E.ON and about 10 months after it doubled up on the asset by buying the remainder. EQT launched the sale process last summer.

In addition to Beijing Enterprises Holding, sources Infrastructure Investor spoke to prior to the announcement said the list of interested parties had included China’s Enterprises Water Group and China Everbright International. A consortium of Macquarie Infrastructure and Real Assets and local utility Steag was also understood to have submitted a bid.

Sources then placed the value of a potential transaction at up to €2 billion.

The deal comes as EQT mulls the launch of its third flagship infrastructure fund, which people close to the matter expect will enter the market in the second quarter of 2016. EQT Infrastructure Fund III will have a target of between €2.5 billion and €3 billion, sources said.

EQT declined to comment.

The firm in December sold Finnish sustainable energy infrastructure company Adven Group Oy, which it acquired in 2012 through its maiden infrastructure fund, to a consortium of AMP Capital and Infracapital.