Antitrust Law Daily Wrap Up, TOP STORY—Additional Time Granted for Regulatory Approval of Divestitures Required to Complete Acquisition of Commercial Waste Collection Business, (Jun 14, 2013)

By Tobias J. Gillett, J.D., LL.M.

The federal district court in Washington, D.C. entered a modified final judgment in a Department of Justice Antitrust Division challenge to Star Atlantic Waste Holdings’ acquisition of Veolia ES Solid Waste Inc.’s solid waste business, providing additional time to complete required divestitures in order to obtain state regulatory approvals (U.S. v. Star Atlantic Waste Holdings, L.P., June 13, 2013, Roberts, R.).

On November 15, 2012, the Department of Justice filed a complaint, together with a proposed settlement, charging that the transaction as originally proposed would have resulted in higher prices for the collection of municipal solid waste from commercial businesses or the disposal of waste in these areas. According to the complaint, Star Atlantic and Veolia were two of only a few significant firms providing commercial waste collection or municipal solid waste disposal services in the geographic areas of northern New Jersey, central Georgia, and Macon. The proposed acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers, the government contended.

Under the terms of a final judgment filed March 4, 2013, the companies had to divest commercial waste collection or disposal assets previously owned by Veolia in New Jersey and Georgia. These assets included three specified transfer stations in northern New Jersey, a landfill and two transfer stations in central Georgia, and three commercial waste collection routes in the Macon metropolitan areas. The judgment required Star Atlantic and Veolia to divest the three transfer stations in northern New Jersey to a single buyer, and to divest to a single buyer the Georgia transfer stations and landfill and the commercial waste routes in the Macon metropolitan area.

The final judgment initially required the companies to divest the assets within five days of notice of the entry of the final judgment, with the United States authorized to extend the deadline by a total of 60 days. On April 11, 2013, the United States approved Coventa Energy as the acquirer of the New Jersey assets, and on May 17, 2013 the United States approved Waste Industries USA, Inc. as the acquirer of the Georgia assets. The United States issued extensions totaling 60 days to complete these divestitures, but Star Atlantic and Veolia were unable to obtain regulatory approvals from the states involved within that time period.

Therefore, the Department of Justice and the companies filed a motion on May 21, 2013, seeking a modified final judgment that would account for the need to obtain regulatory approval. The modified final judgment directs Star Atlantic and Veolia to divest the assets within five days of obtaining regulatory approval from the states of New Jersey and Georgia respectively, and requires them to use their best efforts to accomplish the divestitures “as expeditiously as possible.”

The case is No. 1:12-cv-01847-RWR.

Attorneys: Michael K. Hammaker, U.S. Department of Justice. Eric J. Mahr (Wilmer Cutler Pickering Hale & Dorr LLP) for Star Atlantic Waste Holdings, L.P. David J. Laing (Crowell & Moring LLP) for Veolia Environment S.A.

Companies: Star Atlantic Waste Holdings, L.P.; Veolia Environment S.A.; Veolia ES Solid Waste, Inc.

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