Justice Department Orders Veolia Divestments

The Department of Justice is requiring Star Atlantic Waste Holdings L.P.  to divest Veolia operations, including commercial waste collection or disposal assets in northern New Jersey, central Georgia, and the Macon, Ga., metropolitan area before it can go forward with the Highstar unit’s proposed $1.9 billion acquisition of Veolia.

The Washington-based Justice Department said in a news release that Star Atlantic along with Veolia ES Solid Waste Inc. must make the divestments because the transaction would have resulted in higher prices for municipal solid waste (MSW) collection from commercial businesses or the disposal of waste in these areas.

As part of the move, the Department’s Antitrust Division filed a civil antitrust lawsuit in U.S. District Court in Washington to block the proposed transaction. The proposed settlement would resolve the lawsuit.

 “Without the divestitures required by the department, consumers in northern New Jersey, central Georgia and the Macon metropolitan area would have been harmed by a reduction in competition for commercial solid waste collection or disposal,” said Joseph Wayland, acting assistant attorney general in charge of the Department of Justice’s Antitrust Division. “This remedy ensures that the benefits of competition – namely, lower prices and better service – will be preserved in these areas.”

According to the complaint, the transaction, as originally proposed, would have substantially lessened competition in commercial waste collection or disposal services in the geographic areas of northern New Jersey, central Georgia and Macon. In each of these areas, Star Atlantic and Veolia are two of only a few significant firms providing commercial waste collection or MSW disposal services.

The acquisition would have eliminated a major competitor in each of these areas and resulted in higher prices and poorer service for consumers, the Justice Department said.

Under the proposed settlement, Star Atlantic and Veolia will divest 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 area.

Chicago-based Veolia Environmental Services North America Corp. (VESNA) agreed in July to sell its U.S. solid waste operations to the New York-based investment firm Highstar Capital for $1.91 billion, creating the largest privately held waste and recycling business in the United States.