No 3 US waste haulier Republic to acquire larger rival Allied Waste in $6.24-billion deal

23 June 2008

The second and third largest waste hauliers in the US, Allied Waste Industries, Inc and Republic Services Inc, respectively, today announced that their boards of directors have unanimously approved a definitive merger agreement that firmly establishes one of the leading waste and environmental services providers in the US, with expected pro forma annual revenues of approximately $9 billion and an expected total market capitalisation of approximately $12 billion.

Under the deal Republic Services Inc will acquire its larger rival Allied Waste Industries Inc in a $6.24 billion in share swap deal to create a formidable rival to market leader Waste Management Inc. In 2007, Allied generated revenue of $6.1 billion.

Allied Waste is America's second largest non-hazardous solid waste services company and an environmental leader. Headquartered in Phoenix, AZ, Allied Waste provides waste collection, transfer, recycling and disposal services to millions of residential, commercial and industrial customers in over 100 major markets spanning 38 states and Puerto Rico.

Republic Services, Inc. is a leading provider of environmental services including solid waste collection, transfer and disposal services in the United States. The company's operating units are focused on providing solid waste services for commercial, industrial, municipal and residential customers.

Under the terms of the agreement, Allied shareholders will receive 0.45 shares of Republic common stock for each share of Allied common stock held. Based on the unaffected closing stock prices of both companies on Thursday, 12 June 2008, this represents a premium of approximately 17 per cent over the average closing price of Allied's stock for the previous 30 trading days. In completing the transaction, Republic will issue approximately 198 million shares of common stock to Allied shareholders, representing approximately 52 per cent ownership of the combined company.

Republic expects to put in place a new unsecured senior credit facility and issue new senior notes. The existing senior notes of both Republic and Allied will remain outstanding.