Delek Automotive Systems Ltd. negotiating buy control of Veridis (formerly part of Veolia International)
Veridis, formerly part of Veolia International, is active in waste disposal, desalination, and power production in Israel. Delek Automotive Systems Ltd. (TASE: DLEA), which imports and sells Mazda, Ford and BMW vehicles in Israel, announced today that it was negotiating with a Luxembourgeois company to buy control of Veridis (formerly part of Veolia International). Delek Automotive Systems, headed by Gil Agmon, has made a binding offer of NIS 1.05 billion. Veridis is active in Israel in environmental infrastructure. It deals in collection, treatment and recycling of urban waste and handling of dangerous materials, water desalination, power production and energy solutions. Delek Automotive Systems said the deal was subject to approval of a final agreement between the sides and approval by the Antitrust Commissioner. Delek Automotive Systems says the deal “represents a business opportunity that enables it to penetrate new areas of activity that, it believes, have substantial growth potential that will produce results mainly in the long term.” Last month, Delek Automotive Systems reported a 2.5% rise in third quarter revenue to NIS 834 million and a flat net profit of NIS 80 million, of which NISD 75 million was distributed as a dividend. In previous quarters, Delek Automotive Systems suffered from weakness in sales of Mazda vehicles, one of the most popular brands in Israel. Altogether it sold 17,900 cars in the first three quarters of 2017, 9% fewer than in the corresponding period of 2016, with sales of Mazda cars down by a similar percentage to 11,700, while Ford sales plummeted 21% to 3,650. By contrast, demand for the prestige cars that the company imports was buoyant, and sales of BMW cars rose 10% to over 3,300. Thanks to changes in finance expenses offsetting a decline in gross and operating profit, net profit for the first nine months of 2017 was up 13% to NIS 275 million.