Antitrust Law Daily Waste Management acquisition of Advanced Disposal Services approved subject to divestitures
Friday, October 23, 2020

Waste Management acquisition of Advanced Disposal Services approved subject to divestitures

By Jeffrey May, J.D.

Parties will divest landfills, transfer stations, hauling locations, waste collection routes, and other assets to win antitrust approval of U.S. Department of Justice and five states.

In order for Waste Management, Inc. to proceed with its proposed $4.6 billion acquisition of Advanced Disposal Services, Inc., the parties have agreed to divest 15 landfills, 37 transfer stations, 29 hauling locations, over 200 waste collection routes, and other assets under the terms of a proposed final judgment. If approved by the federal district court in Washington, D.C., the proposed settlement would resolve antitrust concerns raised in a complaint filed with the court by the U.S. Department of Justice and five states. According to the government, without the divestitures, the proposed acquisition would have substantially lessened competition for small container commercial waste collection or municipal solid waste disposal services in over 50 local markets (U.S. v. Waste Management, Inc., Case 1:20-cv-03063-JDB).

The complaint identified likely harm from the original proposed transaction in 33 relevant geographic markets for small container commercial waste collection located in six states (Alabama, Florida, Georgia, South Carolina, Minnesota, and Wisconsin), and 24 relevant geographic markets for municipal solid waste disposal located in eight states (Alabama, Florida, Georgia, Illinois, Indiana, Michigan, Pennsylvania, and Wisconsin). In each of these local markets, the companies competed vigorously against each other and were either the only two or two of only a few significant providers of one or both of these essential services, it was alleged. The combination of the two companies would eliminate head-to-head competition between them and threaten the lower prices and better service that customers have realized from that competition, according to the government. The plaintiff states are Florida, Illinois, Minnesota, Pennsylvania, and Wisconsin.

Waste Management and Advanced Disposal Services announced the deal in April 2019. According to the statement, the transaction would add complementary assets and customer base in the Eastern United States. In June 2020, the parties disclosed their intention to sell to GFL Environmental a combination of Advanced Disposal and Waste Management assets for $835 million in order to win Justice Department approval. According to the Justice Department announcement, the assets must be divested to GFL or another approved buyer.

Attorneys: Jeremy W. Cline, U.S. Department of Justice, for the United States. Brian K. McCalmon (Vedder Price PC) and Andrew M. Lacy (Simpson Thacher & Bartlett LLP) for Waste Management, Inc. William H. Stallings (Mayer Brown LLP) for Advanced Disposal Services, Inc.

Companies: Waste Management, Inc.; Advanced Disposal Services, Inc.; GFL Environmental Inc.

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