Keppel Infrastructure Trust (KIT), Keppel Asia Infrastructure Fund (KAIF), and Keppel Infrastructure (KI) are jointly acquiring Eco Management Korea Holdings (EMK), a South Korean waste management company, for ₩626.1 billion (about $482 million).
In a joint statement, the KIT-led consortium said the acquisition, which will be carried out through a special purpose vehicle, allows Keppel to expand into South Korea.
KIT will hold a 52% stake in the special purpose vehicle while KAI will hold 30%. KI, a unit of Keppel Corp and KIT’s sponsor, will own 18%.
According to the announcement, the proposed acquisition is expected to be completed by the second half of this year.
EMK, an integrated waste manager services player, operates six waste-to-energy plants and five sludge drying facilities. The firm also has the third incineration capacity in the country and manages and owns a landfill that has the country’s fourth largest capacity.
According to a World Bank report, the current trajectory for global waste generation shows that it will grow from 2.24 billion tonne in 2020 to nearly 3.88 billion tonne by 2050.
South Korea has been implementing more stringent environmental regulations, which drives the growth in demand for more waste management solutions.
“The acquisition of a majority stake in EMK is in line with KIT’s strategy of investing in good quality environmental businesses that generate long-term stable cash flows with the potential for growth, given the positive sectoral tailwinds for waste management in South Korea,” said KIFM CEO Jopy Chiang.
Upon completion of the proposed acquisition, KIT’s asset under management is expected to grow from approximately S$4.7 billion as of 30 June 2022 to approximately S$5.3 billion.
KIT is a diversified business trust listed on the Singapore Exchange. It is sponsored by Keppel Infrastructure Holdings Pte. Ltd., which invests in, owns, and operates competitive energy and infrastructure solutions and services.
In 2020, Keppel lost to SK Ecoplant Co in a 1 trillion won deal to buy South Korea’s biggest waste management firm EMC Holdings Co, the Korea Economic Daily reported.