The Department of Justice on Wednesday filed a civil antitrust lawsuit in federal court in an attempt to block EnergySolutions’ $367 million acquisition of Waste Control Specialists, arguing the deal would merge the two largest competitors for low-level radioactive waste (LLRW) disposal in dozens of states.
“Since opening its LLRW disposal facility in 2012, Waste Control Specialists has provided EnergySolutions the only real competition it has ever faced,” acting Assistant Attorney General Renata Hesse of the department’s Antitrust Division said in a statement. “This competition has allowed customers to extract better prices and to receive better and more innovative service in the LLRW disposal industry. If consummated, EnergySolutions’ proposed acquisition of Waste Control Specialists would make EnergySolutions the only option for customers in nearly 40 states. And this at a time when projects worth billions of dollars are set to be awarded in the coming years.”
Low-level waste is a radioactive byproduct of nuclear generation, scientific research, and medical treatment, and includes items such as tools, personal protective clothing, water-purification filters and resins, hardware from nuclear plants, and medical equipment.
The lawsuit, filed in the U.S. District Court for the District of Delaware, says the deal would deny competitive benefits to customers, including universities, hospitals, and nuclear facilities producing 20 percent of electricity in the United States.
EnergySolutions in its own statement Wednesday announced plans to “vigorously defend” the planned acquisition, saying there are numerous disposal sites for LLRW operated by competitors of the two companies. Customers also have the option to store waste on-site, EnergySolutions contended.
“Through merging the two companies, the new entity will realize significant cost synergies through a decrease in management, selling, and administration expenses,” EnergySolutions said. ”Those savings, in turn, can be passed on to utilities and consumers of nuclear electricity. In addition, this merger will save costs on nuclear decommissioning.”
WCS parent company Valhi, in its own statement, said it strongly believes the acquisition is good for its employees, customers, and the industry as a whole.
“Contrary to assertions made by the DOJ in its lawsuit, the merger of these two great companies will provide significant cost savings to commercial generators of LLRW and cost savings on nuclear power plant decommissioning,” the statement reads. “We expect to be successful in this litigation and complete the transaction in a timely fashion, which will provide many benefits to customers including long-term stability and assured disposal services at WCS’s Texas Low Level Radioactive Waste Compact Commission disposal facility in Andrews, Texas.”
According to the complaint, Delaware-based EnergySolutions and Texas-based Waste Control Specialists are the only two significant competitors for LLRW disposal services in 36 states, the District of Columbia, and Puerto Rico. EnergySolutions provides a full range of services for LLRW disposal and decommissioning of nuclear reactors, while WCS operates the only Nuclear Regulatory Commission-licensed disposal facility to accept all types of LLRW from the 38 states and territories. EnergySolutions’ U.S. revenue from LLRW disposal was about $112 million in 2015, according to the release, while WCS earned roughly $45 million in revenue in 2015.
EnergySolutions and WCS reached a tentative agreement on the merger in November 2015. The deal would end litigation between the two companies over EnergySolutions’ claim that WCS engaged in “monopolistic behavior” in a dispute over a disposal contract. EnergySolutions in 2014 bought Studsvik Inc.’s Tennessee processing facilities and exclusive rights to its THOR waste treatment technology in North America and China. Following the sale of Studsvik’s portion of the Semprasafe joint venture to EnergySolutions in 2014, WCS sought to terminate the contract it had held with Studsvik and told customers it would no longer accept waste from the EnergySolutions facility. EnergySolutions called the behavior “anti-competitive” because of WCS’ control of Class B and C disposal. The companies engaged in mediation discussions for months eventually agreeing on the merger.
