What is the primary change in the merger agreement between Waste Management and Advanced Disposal?

The primary change is a reduction in the merger consideration to $30.30 per share in cash for each share of Advanced Disposal common stock. The agreement also modifies terms related to antitrust approvals, divestitures, termination dates, and termination fees.

How has the timeline for the merger been affected?

The mutual right to terminate the merger agreement has been extended from July 13, 2020, to September 30, 2020. This date can automatically extend to November 30, 2020, if certain specified conditions are not met by September 30, 2020.

What are the implications of the agreement to sell assets to GFL Environmental Inc.?

This agreement is a step to address antitrust concerns and facilitate the merger. The sale of these assets is conditioned on the closing of the Waste Management-Advanced Disposal merger and requires approval from the U.S. Department of Justice. It indicates that Waste Management is actively working to satisfy regulatory requirements.

Has the financial risk for Waste Management in this deal changed?

The termination fee payable by Waste Management to Advanced Disposal has increased from $150 million to $250 million under certain termination scenarios. This increases the financial exposure for Waste Management if the deal fails under specific circumstances outlined in the agreement.

WM 8-K: Material Agreements & Regulation FD

Summary

Waste Management, Inc. (WM) filed an 8-K on June 24, 2020, detailing an amendment to its existing merger agreement with Advanced Disposal Services, Inc. (Advanced Disposal). The most significant change is a reduction in the per-share merger consideration to $30.30 in cash, down from previous terms. This amendment also addresses antitrust approvals, including a commitment from WM to use its best efforts to obtain HSR Act approval and remove limitations on divestitures. The termination date for the agreement has been extended to September 30, 2020, with a potential extension to November 30, 2020, under certain conditions. Additionally, the termination fee payable by WM to Advanced Disposal has increased to $250 million under specific circumstances. In conjunction with the amended merger agreement, WM announced an agreement to sell substantially all of the assets anticipated to be divested in connection with the merger to an affiliate of GFL Environmental Inc. This divestiture is subject to the closing of the merger and regulatory approval from the U.S. Department of Justice. The filing also includes an amended voting agreement with a significant Advanced Disposal shareholder, Canada Pension Plan Investment Board, who has agreed to vote in favor of the amended merger agreement. These updates reflect significant adjustments to the terms and timeline of the Advanced Disposal acquisition, aiming to facilitate regulatory clearance and move the transaction forward.

Key Highlights

1Waste Management (WM) amended its merger agreement with Advanced Disposal Services, Inc. (Advanced Disposal), reducing the cash consideration to $30.30 per share.
2The amendment includes WM's commitment to use best efforts to obtain antitrust approval (HSR Act) and remove prior divestiture limitations.
3The agreement's termination date has been extended to September 30, 2020, with a potential extension to November 30, 2020.
4The termination fee payable by WM to Advanced Disposal has been increased to $250 million under specified conditions.
5WM and Advanced Disposal have agreed to sell certain divested assets to an affiliate of GFL Environmental Inc., contingent on the merger closing and regulatory approval.
6A key Advanced Disposal shareholder (Canada Pension Plan Investment Board, ~18% ownership) has entered into an amended voting agreement to support the merger.
7The Advanced Disposal Board unanimously approved the amended merger agreement, deeming it fair to their stockholders.

WASTE MANAGEMENT INC 8-K Report, Material Agreement (Jun 24, 2020)

Summary

Key Highlights

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