S&P keeps Waste Management, Republic on watch

Standard & Poor's said its ratings on Waste Management Inc. (BBB/A-2) and Republic Services Inc. (BBB+/A-2) remain on CreditWatch with negative implications following a statement by Republic that the current offer by Waste Management to acquire Republic for roughly $6.3 billion is not and cannot be expected to lead to a transaction that is more favorable to Republic stockholders than the merger between Republic and Allied Waste Industries Inc. (BB/Watch positive).

The agency said it will continue to keep the ratings for both Waste Management and Republic on CreditWatch with negative implications, as the possibility remains that an acquisition of Republic by Waste Management could still be completed.

S&P said favorable industry characteristics, stronger business diversity and a credible commitment to debt reduction on management's part will partially offset the financial and integration risks involved in a transaction between Republic and Allied Waste.

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