Two Become One

Allied and Republic complete their merger

The merger between Phoenix-based Allied Waste and Republic Services, Fort Lauderdale, Fla., has been finalized after receiving federal and shareholder approval. As of the close of business on Dec. 5, Allied stock was delisted from the New York Stock Exchange.

In mid-November, shareholders for both Allied Waste and Republic Services voted at separate special meetings to approve the proposed merger between two of the industry's largest haulers.

"We are pleased by the overwhelming support of this historic transaction from stockholders of both companies," said Jim O'Connor, chairman and CEO of Republic Services, in a press release. "This merger will bring together our complementary cultures and our shared commitment for superior customer service, while creating compelling strategic and financial benefits for our stockholders."

As part of the deal, the federal Department of Justice has said the companies must divest commercial waste collection and disposal assets serving 15 metropolitan areas, including 87 commercial collection routes, nine landfills and 10 transfer stations.

"Without the divestitures required by the department, consumers in 15 areas throughout the United States would have been harmed by a reduction in competition for commercial solid waste collection and disposal," said Deborah Garza, acting assistant attorney general in charge of the department's Antitrust Division, in a press release. "This remedy ensures that the benefits of competition — namely, lower prices and better service — will be preserved in these areas."

Will Flower, vice president of communications for Republic, says there were no surprises within the department's required divestitures.

Originally announced in June, the all-stock transaction is expected to be worth more than $6 billion and gives Allied stockholders 0.45 Republic shares for each Allied share they own. Republic also issued approximately 196 million shares of common stock to Allied shareholders.

The combined company, which is called Republic Services and headquartered in Phoenix, is expected to generate annual revenues of $9 billion. O'Connor retains his titles with the new company. Likewise, Don Slager, Allied's president and COO, keeps his titles with the new company, as does Tod Holmes, Republic's chief financial officer.

"Our integration teams have spent the past two months analyzing the critical functions and processes of both companies to identify the actions needed for a seamless integration beginning Day One and for capturing the synergies inherent in this combination," Slager said in a press release.

In the latest Waste Age 100 ranking of the largest solid waste companies, Allied ranked second, with $6.07 billion in revenue in 2007. Republic ranked third, with $3.18 billion in revenue last year. Houston-based Waste Management topped the list with $13.31 billion in 2007 revenue.

The companies also have announced the rest of the executive team that will be in place following the merger. Tim Donovan will serve as executive vice president, general counsel and corporate secretary; Brian Bales as executive vice president of business development; Will Flower as executive vice president of communications; Jeff Hughes as executive vice president of human resources; and Gary Sova as executive vice president of sales and marketing.

Mike Cordesman, president and chief operating officer of Republic, and Ed Evans, executive vice president and chief personnel officer of Allied, will not stay with the new company following the merger. "Mike and Ed have made tremendous contributions to each company and to this merger," Slager said in a press release. "Their dedication to the highest levels of customer service and employee development have helped position Republic and Allied for future success."

The new company's field operations will be divided into four regions. Jeff Andrews will serve as senior vice president of Western operations, based in Pleasanton, Calif.; Ron Krall as senior vice president of Eastern operations, based in Chantilly, Va.; Chris Synek as senior vice president of Southern operations, based in Houston; and Kevin Walbridge as senior vice president of Midwestern operations, based in Indianapolis.

The new company will employ more than 35,000 workers and serve more than 13 million customers in 40 states and Puerto Rico.

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