Phoenix-Based Allied Waste & Republic Services Might Merge But - PhoenixCEOCFO.com

Phoenix-Based Allied Waste & Republic Services Might Merge But

On June 23, 2008 Republic Services made an offer to buy Phoenix-based Allied Waste Industries, the 2nd largest waste services firm in the country, for $6.07 billion in stock. Shareholders of the Phoenix-based Allied Waste would own 52 percent of the combined company, which would be led by Republic Chairman and CEO James E. O'Connor. Allied Waste's President and COO, Donald Slager, 46, would be the new President and COO. The company would be called Republic Services Inc. but its headquarters would be in Phoenix.

On July 14, 2008 Houston-based Waste Management, the largest waste services company in the US, decided to jump in and announced a $6.3 billion takeover of Republic Services. Republic Services has so far rejected Waste Management's bid and has proceeded with its merger with Allied Waste.

Businessweek reports that a Republic-Allied deal would create a company with a market share of 17% to 18% in North America and would be a credible rival to Waste Management's 24% share. Waste Management's Republic bid would boost its market share to 30%, putting even more distance between Waste Management and its second-place rival, Allied Waste, with a market share of 10% or 11%.

The Houston Business Journal has reported that the Gates Foundation is getting involved in the deal on behalf of Republic. Republic has given the green light for the Bill and Melinda Gates Foundation and Cascade Investments LLC to acquire as much as 20 percent of its outstanding shares to build up its institutional holdings. The Houston Business Journal also noted that "The Bill and Melinda Gates Foundation appears to be playing both sides of a potential Republic-Waste Management merger. According to Securities and Exchange Commission filings, the foundation also holds 6.8 million Waste Management shares."

John Laub is the Chairman of the Phoenix CEO-CFO Group.

1. "Republic Services to Buy Allied Waste for $6.07B. Republic Services to Pay $6.07 Billion in Stock for Allied Waste, O'Connor to be CEO." Brian Skoloff. Associated Press. June 23, 2008.

2. "Waste Mgmt Bidding to Scoop Up Republic." Smart Money. Dow Jones Newswires.
July 14, 2008.

3. "Republic Services and Allied Waste Announce Merger Integration Team." Joint Company Press Release. Business Wire. July 23, 2008.

4. "Republic Services Issues Statement in Response to Waste Management's HSR Filing." Company Press Release. Business Wire. July 24, 2008.

5. "Waste Management: Trashing a Merger? The Top Waste Hauler Tries to Block a Republic Services-Allied Waste Deal with its Own $6.2 Billion Bid for Republic. Will Regulators Balk?" Ben Steverman. Business Week. July 15, 2008.

6. "Waste Management Still in Hunt for Republic." Greg Barr. Houston Business Journal. July 28, 2008.