Waste Management Inc. on Monday said it is buying Eastern Environmental Services in a $1.3 billion stock-swap that values Eastern at $33.75 per share.
Eastern Environmental, the country's fifth largest garbage hauler, dropped 3 1/4 to 32 on Friday ahead of the news.
Under the terms of the agreement each of Eastern's 38.5 million shares will be exchanged for 0.6406 shares of Waste Management common stock. At Friday's closing price of 52 11/16, a share for Waste Management, the deal is valued at about $1.3 billion.
Houston-based Waste Management is the largest trash hauler in the country operating in the U.S., Canada, Puerto Rico, and Mexico.
Waste Management CEO John E. Drury said that the Eastern acquisition would create about $75 million in savings.
The closing of the merger is subject to approval by Eastern's shareholders, governmental approvals, and other customary closing conditions. The companies expect the merger to close before the end of the year.
Written By Steve Gelsi