STATE COMPANY Bord na Móna has walked away from talks to buy French waste manager Veolia’s Irish business.

Bord na Móna’s waste management subsidiary, AES, recently entered exclusive talks to buy Veolia from its Paris-based parent after seeing off rivals Panda, NTR-owned Greenstar and One51.

However, it emerged last night that the State company has since walked away from the process on the grounds that it believes Veolia’s parent is seeking too much for the company.

When it opened talks, reports suggested that Bord na Móna was willing to bid €50 million for Veolia. It is understood that the French parent was looking for over €10 million more.

Bord na Móna’s position may also have changed during the due diligence which it began carrying out on the company last month.

Minister for Energy Eamon Ryan and Minister for Finance Brian Lenihan would have to approve any purchase made by the State company. This means its management would have to get value for money.

Bord na Móna is the State company responsible for the management of the Republic’s peat bogs. It plans to spend €1.4 billion diversifying its business into energy, waste-processing and other related activities.

It bought AES last year, and its move to buy Veolia signalled that it intends becoming a force in consolidating the Republic’s fragmented waste-management business.

The company requires large amounts of various types of organic household waste to replace the peat in its peat moss fertiliser products.

Veolia is a utility that employs 1,200 people in its water, waste and energy businesses in Ireland. The company also operates the Luas light rail service in Dublin.

The French business is selling its Irish waste operation, formerly known as Onyx, as part of an “asset rotation” programme. The waste operation’s latest filed accounts show it made a profit of €8 million on sales of €64 million in 2006. The company, which is based in Tallaght, employs 200 staff and had accumulated profits of €17.3 million at the end of 2006.