FIRSTGROUP AND LAIDLAW SELL OFF SCHOOL BUS CONTRACT IN ALASKA TO RESOLVE ANTITRUST CONCERNS

On September 27, FirstGroup plc entered into a settlement agreement with the DOJ for First Group to sell off a large school bus contract and associated assets in Alaska in order to progress with its acquisition of Laidlaw International Inc. Without the settlement agreement, the DOJ believed the transaction raised competition concerns in the provision of school bus transportation in Anchorage, Alaska. First Group and Laidlaw contract with school districts throughout the United States to provide school bus transportation services.
The settlement agreement spurred the DOJ to close its review of the transaction. The investigation was closed under the Antitrust Division’s “fix-it-first” policy and required the sale of FirstGroup’s Anchorage school bus business to Forsythe Transportation. The Anchorage School Board approved transfer of the contract to Forsythe on September 24, 2007.

The Antitrust Division stated that it conducted its investigation working closely with the Alaska State Attorney General’s office and several other states, which simultaneously conducted their own investigations. The Antitrust Division issued a second request to review the transaction on April 30, 2007. The seven month investigation, which began with a nationwide focus, resulted in only one divestiture of a contract in Alaska.

FirstGroup is the United Kingdom’s largest bus operator. Its U.S. school bus division, First Student Inc., is based in Cincinnati. It posts revenues of about $800 million. Laidlaw Inc., headquartered in Naperville, Ill., is the largest school bus service company in the United States. Its school bus division, Laidlaw Education Services, posts revenues of more than $1.5 billion.

Andre Barlow
(202) 589-1834
abarlow@dbmlawgroup.com