Republic Services and Allied Waste to Merge to Form Leading Environmental Services Company with Enterprise Value of over $20 Billion

Business Wire, June 23, 2008

Merger of Industry's Second and Third Largest Companies Integrates Complementary Service Areas, Assets and Commitment to Customer Service

Combination Expected to Create Powerful Cash Flow Generator with Significant Synergy Opportunities

Company Will Be Named Republic Services, Inc., with Corporate Headquarters in Phoenix

FORT LAUDERDALE, Fla. & PHOENIX -- Republic Services, Inc. (NYSE: RSG) and Allied Waste Industries, Inc. (NYSE: AW) today announced that their boards of directors have unanimously approved a definitive merger agreement that firmly establishes one of the nation's leading waste and environmental services providers, with expected pro forma annual revenues of approximately $9 billion and an expected total market capitalization of approximately $12 billion. The combined company will have more than 35,000 employees serving more than 13 million customers in 40 states and Puerto Rico. The transaction is expected to close by the fourth quarter of 2008, to generate approximately $150 million in net annual synergies and to be accretive to Republic's earnings per share in the first year following completion of the merger.

The merger will strengthen the national service platform of the companies and integrate the collection, transfer, recycling and disposal (landfill) operations from Republic and Allied under a proven management team, led by Republic's Chairman and Chief Executive Officer, James E. O'Connor. The transaction will also assemble a growing landfill gas-to-energy portfolio and significant untapped renewable energy resources. The combined company will be diversified across geographic markets, customer segments and service offerings, and will be committed to providing superior customer service. The company expects to generate strong and predictable cash flows from operations in excess of $1.7 billion annually that will be used to invest in the business, fund the dividend program and reduce debt to maintain and improve the company's investment grade credit rating.

"By combining the strengths of two great companies and integrating executives from both teams, Republic will enhance its leadership position in the U.S. environmental services industry, building on both companies' foundations of profitable growth," said James E. O'Connor, Chairman and Chief Executive Officer of Republic. "As each company has done individually, the combined company will remain fully committed to serving the needs of our customers, shareholders and employees. The vertically integrated model of the combined company - linking collection, transfer, recycling and disposal services - enhances cash flow, earnings and return on capital for our shareholders, while reducing our risk. Our strategic focus remains on improving return on invested capital, reducing debt and generating higher levels of free cash flow. At the same time, our business model will blend the best practices and complementary assets of the two companies to provide unmatched customer service and operating efficiency. Our employees will benefit from the enhanced career opportunities that result from a larger company better positioned for future success."

John Zillmer, Chairman and Chief Executive Officer of Allied, said, "Our two companies have known and respected each other for many years, and the time is right for us to take the next logical step in the development of both companies, thus accelerating our ability to achieve our strategic objectives and enhancing our plan for profitable growth. Republic has an extensive presence in the high-growth Sunbelt markets, an established franchise business and a strong capital structure. Allied has a broad national footprint, an innovative procurement platform and significant internalization opportunities. Together, we are positioned for greater success than either company could achieve on its own."

Transaction Terms

Under the terms of the agreement, Allied shareholders will receive 0.45 shares of Republic common stock for each share of Allied common stock held. Based on the unaffected closing stock prices of both companies on Thursday, June 12, 2008, this represents a premium of approximately 17% over the average closing price of Allied's stock for the previous 30 trading days. In completing the transaction, Republic will issue approximately 198 million shares of common stock to Allied shareholders, representing approximately 52% ownership of the combined company.

In connection with the transaction, Republic expects to put in place a new unsecured senior credit facility and issue new senior notes. The existing senior notes of both Republic and Allied will remain outstanding.

Following completion of the transaction, James E. O'Connor will become Chairman and Chief Executive Officer of the combined company, while Don Slager will become President and Chief Operating Officer. Tod Holmes will become Chief Financial Officer.

The Board of Directors of the combined company will consist of 11 members, including Mr. O'Connor, five independent directors from the current Republic board of directors and five independent directors from the current Allied board of directors. The company, which will be based in Phoenix, will be named Republic Services, Inc. and traded under the ticker symbol RSG on The New York Stock Exchange.