Waste Connections-Progressive Waste 'Committed' To Merger After Tax Inversion Selloff

Shares of Allergan plc Ordinary Shares AGN plunged more than 16 percent on Tuesday after the U.S. Treasury Department and Internal Revenue Service revamped their efforts to limit U.S.-based companies from participating in tax inversion deals.

The announcement had a ripple affect across many industries, including the waste management sector.

Waste Connections, Inc. WCN, a U.S.-based integrated municipal solid waste services company that provides solid waste collection, announced earlier this year it plans on acquiring Progressive Waste Solutions Ltd BIN, a Canada-based peer.

Shares of Waste Connections lost more than 5 percent on Tuesday, while Progressive Waste Solutions' stock lost more than 6 percent.

According to Bloomberg, Waste Connection's acquisition will enable the company to move its tax domicile to Canada in a tax inversion deal.

"One of the reasons that we structured it in the way that we did is it maximized the benefits of the existing structures," Bloomberg quoted Waste Connections Chief Executive Officer Ronald J. Mittelstaedt as saying during a conference call. "We sort of achieved the best of both companies' tax situation."

On Tuesday, the two companies issued a joint statement.

"Based upon an initial review by the companies and their advisors, the companies believe that the proposed regulations could have an impact of less than 3% of the combined company expected Year 1 adjusted free cash flow*, which is estimated to be more than $625 million, excluding any additional structuring benefits that could offset such impact," the companies said in its statement. "The two companies remain committed to the strategic merger announced on January 19, 2016, which is expected to close in the second quarter of 2016."