DOJ Obtains Divesture in Stericycle Inc.’s Acquisition of Healthcare Waste Solutions

On April 8, 2011, Stericycle Inc. (“Stericycle”) entered into a settlement agreement with Department of Justice (“DOJ”) allowing it to proceed with its acquisition of Healthcare Waste Solutions Inc. (“HWS”). The DOJ along with the attorney general of the state of New York filed an antitrust lawsuit to block the transaction and simultaneously filed a proposed settlement to resolve antitrust concerns raised by the transaction.
The DOJ's complaint alleged that the transaction, as originally proposed, would substantially lessen competition in the provision of infectious waste treatment services to hospitals and other health care facilities in the New York City metropolitan area, resulting in higher prices and reduced service. The DOJ also alleged that the market was highly concentrated as the proposed acquisition would reduce the number of competitors in the local area from three to two. Moreover, Stericycle and HWS would have obtained approximately 90 percent of the New York City metropolitan area's infectious waste treatment market had the DOJ taken no action. Without a divestiture, critical healthcare facilities in the New York City area would lose the benefits of competition and higher prices may result.

Under the proposed settlement agreement, Stericycle and HWS must divest HWS's transfer station located in the Bronx, N.Y., to a viable purchaser approved by the DOJ. Transfer stations are facilities at which infectious waste collected by daily route trucks is transferred onto tractor trailers for efficient shipment of the waste to distant treatment facilities.

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

Yolinda Qu
(202) 589-1834
yqu@dbmlawgroup.com