One of the world’s largest waste-to-energy companies, Waste Management, Inc. (WMI), has shelled out US$140m to share in turning China’s waste into energy. The company will acquire a 40% stake in Shanghai Environment Group (SEG), a leading provider of environmental services, from Shanghai Chengtou Holding.
Milbank, King & Wood and Shanghai Run He were the three legal firms assisting the transaction. Head of Milbank’s China practice and Asia corporate practice, Anthony Root, led the firm’s representation of WMI, while King & Wood’s Shanghai-based partner Zhang Yi (pictured) and lawyer Alan Du served as the acquiror’s PRC counsel. The Run He team headed by partner Robert Li acted for SEG.
“This transaction is the single-largest investment in China’s solid waste management to date, and the target company is the leading player in the domestic market,” King & Wood’s Zhang said. “This makes the handling of this deal very different from other M&A transactions.”
The world is watching China speed up its renewable energy development. The country plans to dramatically increase the use of solar and wind power, aiming to generate up to 20% of its energy from renewable sources by 2020. Zhang is positive that the renewable energy sector will continue to grow, inviting more foreign investors into the market. Milbank’s Root echoes this perspective. “Green and alternative energy investment has been increasing rapidly and will continue to do so.”
Milbank has been busy advising investment into this sector. The firm recently advised the Japanese sponsors on the 50MW Datang wind-generating project in the Inner Mongolia Autonomous Region. It also acted for GCL-Poly Energy, a leading integrated green energy enterprise, when it expanded its portfolio in July by acquiring Jiangsu Zhongneng Polysilicon Technology Development for US$3.4bn.
This deal is subject to the approval of the PRC Ministry of Commerce.
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