REFILE-UPDATE 2-Waste Connections to buy Canada's Progressive Waste for $2.67 bln

Tue Jan 19, 2016 10:06am EST
 
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(Adds dropped word "last" in paragraph 4)

By Ankit Ajmera

Jan 19 (Reuters) - U.S.-based Waste Connections Inc is buying Canada's Progressive Waste Solutions Ltd for about $2.67 billion in a deal that will make the combination the third-biggest waste management services provider in North America.

The all-stock deal, structured as a reverse merger, will allow Waste Connections to move its tax domicile to Canada with its shareholders owning about 70 pct of the combined company.

The transaction is the latest in a string of deals where U.S. companies have acquired foreign companies through reverse mergers to avoid higher tax rates at home.

The $24.55 per share offer represents a premium of 4.4 percent to the last closing price of Progressive Waste's U.S.-listed stock.

Waste Connections's shares were up 7 pct at $54.48 in early trading on Tuesday, while Progressive Waste's U.S.-listed stock rose 8.3 percent to $25.52.

With proforma revenue of about $4.1 billion, the combination will command a market share of about 7 percent, Barclays analyst Jon Windham wrote in a note to clients.

The combined company and its larger rivals - Waste Management Inc and Republic Services Inc - will corner nearly half of the market share of the North American waste disposal market, the analyst said.   Continued...