USA Waste to Acquire United Waste

The pace of consolidation among trash firms picked up with USA Waste Services Inc. saying it will buy United Waste Systems Inc. in a stock deal valued at $1.7 billion. But the stocks of both companies fell sharply on the belief that Houston-based USA Waste’s offer is inadequate and that the firm might be growing too fast. Under the definitive agreement, USA Waste would offer 1.075 shares of its common stock for each United Waste share in a tax-free pooling of interests. United Waste stock closed down $4.25 at $33.375 on Nasdaq. Greenwich, Conn.-based USA Waste slid $3.375 to $31.875 on the NYSE. Based on the transaction ratio and Monday’s stock prices, the deal would value United Waste shares at $34.27 each--well below the stock’s 52-week high of $41.75, reached last week. The transaction would create a company that operates 155 landfills and 270 garbage collection companies serving 3 million customers in the U.S., Canada, Mexico and Puerto Rico.