K+S Group, Kassel, said it has secured final clearance from the German Federal Cartel Office, Bunkeskartellamt, for the merger of the new REKS waste management joint venture with Germany’s Remex GmbH. The closing of the transaction is now expected before the end of 2021.
As a result of the contribution of the K+S stakes to REKS, K+S will generate a one-off gain of about €200 million in the fourth quarter. At the same time, a total cash inflow of about €90 million before taxes will be generated, the company said in a Dec. 1 statement.
Therefore, K+S now expects operating earnings EBITDA of the K+S Group for full-year 2021 of about €830 million (previous guidance: about €630 million excluding the REKS transaction), and a slightly positive free cash flow. Full-year 2020 EBITDA was €267 million.
The company in late October warned that the completion of the REKS transaction likely would be delayed into 2022 after the E.U. Commission referred the antitrust clearance procedure to the German Federal Cartel Office (GM Oct. 29, p. 28).
The regulatory clearance came after Remex – owned by Germany’s Rethmann Group – sold its share in competitor Minex GmbH, and the two jv parties agreed to further contractual arrangements, according to a Bloomberg report, citing a statement on Bunkeskartellamt’s website.
The further contractual arrangements include that the Stassfurt waste incineration plant belonging to the Rethmann Group will in future channel its waste flows through Minex and not the REKS jv.
In addition, K+S is required to continue to offer intermediaries of hazardous fly ashes disposal capacities in its sites for 10 years so distributors still will be able to deliver waste to these sites in the future. Finally, for a period of 15 years, K+S is required to accept waste from waste producers in the event of short-term unscheduled disruptions to alternative disposal channels – i.e., the so-called “redundancy commitment.”
K+S and Remex GmbH reached an agreement in December 2020 to partner up to bundle their respective waste management activities in a new jv, REKS GmbH & Co. KG, in which both companies would be equal partners, each with 50 percent participation (GM Dec. 31, 2020).
K+S said the jv is aimed “to open up the attractive and rapidly growing European market for the recovery and disposal to waste as well as the realization of sustainable waste management solutions.”