HomeMy WebLinkAbout1996-02-27 - AGENDA REPORTS - WWI PROPOSED MERGER (2)AGENDA REPORT
Item to be presented by: V
Lynn M. Harris
CONSENT CALENDAR
DATE: February 27, 1996
SUBJECT: WESTERN WASTE INDUSTRIES: STATUS OF PROPOSED MERGER
DEPARTMENT: Public Works
BACKGROUND
The City was notified through correspondence dated January 30, 1996, that Western Waste
Industries (WWI) had entered into an agreement and plan of merger with USA Waste Services of
Houston, Texas. WWI is the parent company of Blue Barrel Disposal, one of the City's franchised
refuse/recycling haulers. The correspondence requested that the City formally approve the proposed
merger as required by the franchise agreement..
The residential and commercial franchise agreements indicate that any transfer or reassignment of
ownership must be approved by City Council resolution prior to completion of such transaction.
The agreements also allow the City to impose reasonable conditions of approval on such
transactions.
The City Manager responded to W WI's request for approval in a letter dated February 8, 1996. The
letter indicated that approval of the proposed merger is anticipated, however, it would be necessary
for principals from WWI to meet with appropriate City staff to discuss requisite conditions of
approval. The request for merger approval from WWI and the City's letter of response are attached
for City Council reference..
RECOMMENDATION
Receive and file report; direct staff to return to the City Council with results of discussions with
Western Waste Industries regarding conditions of merger approval.
ATTACHMENTS
Letter from Western Waste Industries dated January 30, 1996.
Response letter from City Manager dated February 8, 1996.
F\HoWkCCAGENDM„RRA Agenda Item;A
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RECEIVED
FEB 219961
CITY MANAGER'S OFFICE
CITY OF SANTA CLARITA -
January 30, 1996
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George Carvalho
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9 51996
City Manager
City of Santa ClaritaLrIVN
- Deputy Gry SIS
23920 Valencia Blvd
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Santa Clarita, CA 91355
Dear Mr. Carvalho:
On December 18, 1995, USA Waste Services, Inc. and Western Waste Industries entered .'
into an agreement and plan of merger.
Our franchise agreement with you provides that we must request your approval or consent
upon change of control of Western's stock. Please consider this letter our formal request for.
your approval.
The merger agreement provides that Western Waste would become a wholly-owned
subsidiary of USA Waste Services, Inc. The merger is subject to a number of conditions,
including obtaining the approval of stockholders of USA Waste and Western Waste and
obtaining any necessary regulatory waivers or approvals.
With the proposed merger between Western Waste Industries, currently the nation's fifth
largest solid waste services company, and USA Waste Services, the fourth largest, the
combined companies have 35 landfills; 24 transfer stations; operations in 23 states;
annualized revenue of over $800 million; assets over $1 billion; over 110 municipal
franchises; and approximately 1.3 million customers. That makes us the third largest solid
waste company in North America.
We believe that the merger of these two companies bring numerous synergies which you as
a customer of Western Waste Industries will benefit from This merger will create an influx
of capital and assets, as well as bringing -together some of the brightest talent in the
integrated waste management services arena Western will retain its corporate identity, and I
will remain CEO and Chairman of the Board of Western Waste.
21061 SOUTH WESTERN AVENUE, TORRANCE, CALIFORNIA 90601 • 310 / 222-8705 • FAX 3101 212.7092
%—ity Of
Santa Clarita
Public Works Phone
25663 W. Ave. Stanford (805) 294-2500 _
Santa Clarita Fax _
California 91355-1103 (805) 294-2517 —
February 8, 1996
Mr. Kosti Shirvanian
CEO and Chairman of the Board
Western Waste Industries
21061 S. Western Ave.
Torrance, CA00501
fi
Dear Mr anian:
Thank you for your letter of January 30, 1996 requesting the City's formal approval
of Western Waste Industries proposed plan of merger with USA Waste Services.
As referenced in your letter, any corporate transfer or reassignment must be formally
approved by City Council resolution. The referenced sections of the residential and
commercial agreements also provide for reasonable conditions of approval.
The City anticipates approval of the proposed merger, however, it is imperative that
our organizations arrange a meeting at your earliest possible convenience to discuss
related conditions of approval.
You may contact Lynn M. Harris, Deputy City Manager and Director of Public
Works, at (805) 294-2500 to arrange this meeting.
A
aravalho
ager
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POINTED ON RECYCLED PAPER