UAE’s utility giant Abu Dhabi National Energy Company (TAQA) has announced the full acquisition of SWS Holding following a deal worth AED 1.7 billion ($463 million), according to a press statement by the company.
The acquisition will create a vertically integrated player with strong water treatment capabilities and a commitment to operational efficiency and customer service excellence.
SWS Holding, created in May 2023 and which owns Abu Dhabi Sustainable Water Solutions Company (ADSWS), focuses on resource recovery and water circularity to benefit industries and communities.
Under the terms of the agreement, TAQA will acquire all outstanding shares of SWS Holding for AED 1.7bn, with 50% of the consideration to be paid upon completion and the remaining 50% to be paid one year after completion.
TAQA will make an additional payment in 2024 linked to net profits generated during 2023.
The transaction is expected to generate significant synergies which will create value for TAQA and its shareholders.
It is also expected significantly enhance TAQA’s cashflow profile as well as its long-term earnings.
“The strategic acquisition of SWS Holding is an important step in TAQA’s accelerated delivery of its growth agenda,” says Jasim Husain Thabet, TAQA’s Group CEO and Managing Director.
“It is a logical extension of our regulated asset base into wastewater networks and treatment.”
The transaction is expected to complete this year, subject to a successful and timely completion of necessary transaction requirements, including obtaining regulatory and relevant third-party approvals.
ADSWS, previously known as Abu Dhabi Sewerage Services Company (ADSSC), is responsible for wastewater collection, treatment, and reuse in Abu Dhabi.
According to the statement, SWS Holding is a strong complement to TAQA’s current portfolio and is projected to increase TAQA’s regulated asset value by about AED 16 billion.
TAQA is owned 90.03% by Abu Dhabi Power Corporation (ADPower) and 7.30% by Multiply Group. Its existing regulated asset value is approximately AED 75 billion.
ADSWS will adhere to the regulatory controls set by the Abu Dhabi Department of Energy (DoE), which also govern TAQA’s UAE transmission and distribution businesses.
ADSWS operates a vast network of sewer pipelines spanning over 12,000 km. It possesses 37 wholly owned treatment plants with a sewage treatment capacity of around 1.3 million cubic meters per day.
ADSWS also holds a 60% ownership stake in two companies that manage four sewage treatment plants in Abu Dhabi under the ‘Build, Own, Operate and Transfer’ (BOOT) model.
