Allied Waste (AW) Comments on Announcement By Republic Services (RSG) Board

July 18, 2008 1:18 PM EDT

Allied Waste Industries, Inc. (NYSE: AW) provided the following statement regarding the determination by the Board of Directors of Republic Services, Inc. (NYSE: RSG) that the Waste Management Inc. proposal announced on July 14 does not constitute, and could not reasonably be expected to lead to, a transaction that is more favorable to Republic stockholders than the definitive merger agreement in place between Republic and Allied:

"We are pleased that the Board of Directors of Republic Services has reaffirmed its commitment to the pending Allied-Republic merger, recognizing that it represents the best opportunity to create significant long-term value for our respective shareholders.

"Allied and Republic share a common vision and our combined resources will create a formidable competitor to Waste Management in the waste and environmental services industry. Together, we will have a strong national footprint, a higher revenue growth profile and significantly higher operating margins than Waste Management. Our combined company will possess an investment grade balance sheet, and the transaction will provide a cash yield to both sets of shareholders.

"Allied is also gratified that Republic's Board, in evaluating Waste Management's proposal, recognized the extraordinary execution risks inherent to it. A hypothetical Waste Management-Republic combination would encounter more and greater objections from federal and state regulators than our pending transaction. Waste Management's and Republic's operations substantially overlap. This overlap significantly exceeds that of Allied's and Republic's operations, making the competitive issues of the hypothetical Waste Management transaction larger, more numerous and more difficult to remedy. Regulators also could question whether the massive piecemeal dismemberment of Republic would be an acceptable remedy under the circumstances, and the process of identifying and evaluating any potential remedies would be protracted and complex. There could be no assurance of an acceptable outcome by 'early 2009' -- the date Waste Management claimed their proposed transaction could close -- if at all.

"Finally, Waste Management's proposal lacked a financing commitment and was further burdened by a closing condition regarding the maintenance of that company's investment grade status, which Moody's subsequently indicated it would be unlikely to achieve.

"We look forward to working together with Republic's management to complete this transaction according to the schedule we have outlined. In a joint effort, we have invested considerable time and resources in analyzing, planning, and achieving material progress in working with federal regulators. We are now on the threshold of the next phase of the Hart Scott Rodino regulatory review with an expectation of achieving regulatory clearance within 45-60 days and completing the merger by the fourth quarter of 2008. In addition, we expect to file our joint proxy statement promptly."[SM]

Related Categories

Mergers and Acquisitions

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?