Waste Management drops bid for Republic

Houston-based Waste Management (NYSE: WMI) announced today that it has withdrawn its proposal to acquire Fort Lauderdale, Fla.'s Republic Services (NYSE: RSG), citing the turbulent financial markets.

Market leader Waste Management's bid to buy Republic would have blocked a planned merger between Republic and Phoenix-based Allied Waste Industries (NYSE: AW), the No. 3 and No. 2 companies in the industry.

"When we began this process, we said that we would be a disciplined buyer and that we would not risk our strong financial position to acquire Republic," said David Steiner, CEO of Waste Management, in a statement.

"Given the current state of the financial markets, we believe that it would not be prudent to continue to pursue the acquisition of Republic."

Earlier this month, Republic indicated in a filing with the U.S. Securities and Exchange Commission that Waste Management's stance appeared to be softening (see Waste Management backing off Republic?).

Although Republic said at the time that Waste Management was backing off its bid for the whole company, the filing said that Steiner "expressed an interest" in buying any assets that would be divested as a result of a Republic-Allied combination.

Republic turned down a second takeover offer from Waste Management in August, a $37 per share cash bid, up from $34 (see Republic again rejects Waste Management).

Republic expects to close its merger with Allied in the fourth quarter of this year.