[Federal Register Volume 63, Number 242 (Thursday, December 17, 1998)]
[Notices]
[Pages 69710-69711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33460]
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DEPARTMENT OF TRANSPORTATION
Surface Transportation Board
[STB Docket No. MC-F-20940]
Laidlaw Inc. and Laidlaw Transit Acquisition Corp.--Merger--
Greyhound Lines, Inc.
AGENCY: Surface Transportation Board.
ACTION: Notice tentatively approving finance transaction.
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SUMMARY: Laidlaw Inc. (Laidlaw), a noncarrier that controls seven
interstate motor passenger carriers, and Laidlaw Transit Acquisition
Corp. (LTAC), a wholly owned noncarrier subsidiary (collectively,
applicants), have filed an application under 49 U.S.C. 14303 for
approval of the merger of LTAC with Greyhound Lines, Inc. (Greyhound),
a motor carrier of passengers. Persons wishing to oppose the
application must follow the rules under 49 CFR part 1182 (effective
October 1, 1998). The Board has tentatively approved the transaction,
and, if no opposing comments are timely filed, this notice will be the
final Board action.
DATES: Comments must be filed by February 1, 1999. Applicants may file
a reply by February 16, 1999. If no comments are filed by February 1,
1999, this notice is effective on that date.
ADDRESSES: Send an original and 10 copies of any comments referring to
STB Docket No. MC-F-20940 to: Surface Transportation Board, Office of
the Secretary, Case Control Unit, 1925 K Street, N.W., Washington, DC
20423-0001. In addition, send one copy of comments to applicants'
representative: Raymond A. Jacobsen, Jr., McDermott, Will & Emery, 600
13th Street, N.W., Washington, DC 20005-3096.
FOR FURTHER INFORMATION CONTACT: Beryl Gordon, (202) 565-1600. [TDD for
the hearing impaired: (202) 565-1695.]
SUPPLEMENTARY INFORMATION: Laidlaw 1 currently controls
seven interstate motor passenger carriers 2 and three
intrastate or regional carriers not subject to federal
[[Page 69711]]
economic regulation.3 Greyhound holds nationwide, motor
passenger carrier operating authority under Docket No. MC-1515, and
controls, directly or indirectly, ten regional motor passenger
carriers.4
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\1\ Laidlaw, through its affiliates, is one of the largest
school bus operators in the United States. It also operates
municipal, transit, charter buses, and medical transportation in
Canada and the United States. However, no carrier controlled by
Laidlaw conducts any regularly scheduled intercity passenger
operations in the United States.
\2\ Laidlaw's federally regulated affiliates are: Greyhound
Canada Transportation Corp. (Greyhound Canada) (MC-304126), which is
not currently affiliated with Greyhound Lines, Inc.; Laidlaw
Transit, Inc. (MC-161299); Laidlaw Transit Ltd. (MC-102189); Roesch
Lines, Inc. (Roesch) (MC-119843); Safe Ride Services, Inc. (Safe
Ride) (MC-246193); Vancom Transportation-Illinois, L.P. (MC-167816);
and Willett Motor Coach Co. (Willett) (MC-16073).
\3\ Laidlaw's other motor transportation affiliates are: Empex
Ventures, Inc. (California); Laidlaw Transit Services, Inc.
(Minnesota and the Washington Metropolitan Area Transit Commission);
and The Dave Companies, Inc. (California and Minnesota).
\4\ Greyhound's motor passenger carrier affiliates are:
Continental Panhandle Lines, Inc. (MC-8742); Valley Transit Co.,
Inc. (MC-74); Carolina Coach Co., Inc. (MC-13300); Texas, New Mexico
& Oklahoma Coaches, Inc. (MC-61120); Vermont Transit Co. Inc. (MC-
45626); Los Rapidos, Inc. (MC-293638); Americanos U.S.A., L.L.C.
(Americanos) (MC-309813); Gonzales, Inc. d/b/a Golden State
Transportation (Gonzales) (MC-173837); PRB Acquisition LLC (MC-
66810); and Autobuses Amigos, L.L.C. (Amigos) (MC-340462-C).
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Pursuant to a merger agreement with Greyhound, Laidlaw will acquire
Greyhound's outstanding common stock, and LTAC will be merged with and
into Greyhound, with Greyhound being the surviving corporation. After
completion of the merger, Greyhound will be a subsidiary of Laidlaw. As
a consequence, no operating authorities for any of the carriers
involved will be transferred as a result of this transaction.
Applicants submit that approval of the proposed transaction will be
consistent with the public interest and will have no adverse effects on
the adequacy of transportation to the public, the interest of
employees, or fixed charges. On the contrary, applicants assert that
the proposed merger will significantly benefit the traveling public,
employees, and shareholders, through the synergies, efficiencies, and
savings that will result from the combined resources, skill, and
operations of the two complementary companies. In this regard, it is
anticipated that savings will be derived from volume purchases of
vehicles, fuel, equipment, and services, and from reduced overhead and
operating costs related to insurance, financing, headquarters, and
securities and accounting reporting. The combined companies will be
better positioned to manage equipment utilization, to develop financial
and strategic plans, and to improve the operations with the goal of
enhancing service to the public while achieving growth for the company.
In this regard, Laidlaw's financial strength is expected to assist in
reducing Greyhound's debt and permit investments for growth while
improving customer service. Moreover, the proposed merger of the two
complementary operations is expected to facilitate the implementation
of seamless U.S. and Canadian passenger services, including the
development of cross-border fares and greater promotional fares between
Greyhound Canada and Greyhound.
Applicants state that Greyhound's management will remain with
Greyhound, to ensure continued employee enthusiasm and Greyhound's
reputation for service. Given the seasonal nature of the scheduled
intercity motor passenger carrier business, the proposed merger is also
expected to permit greater annual financial stability for Greyhound,
due to the strength and stability of Laidlaw's cash flow. In addition
to this added financial stability, the merger is expected to provide
Greyhound the capital it needs to continue to revitalize and expand
affordable intercity bus services and, therefore, provide better
service to the public. Applicants assert that the merger will not
adversely affect Laidlaw's fixed charges.
Applicants submit that the proposed transaction will greatly
benefit current and future carrier employees. They assert that the
merged company will observe all current Greyhound collective-bargaining
agreements, that all Greyhound carrier employees will be able to
continue in their present positions, and that no layoffs are planned in
the short-term as part of the merger. Rather, Laidlaw anticipates
continued growth and expansion of services, which may result in the
need to hire new carrier employees.
Applicants state that the aggregate gross operating revenues from
interstate operations of the companies exceeded $2 million during the
12-month period prior to the date of the application. Applicants
certify that neither Laidlaw, Greyhound, nor any of their affiliates,
holds an unsatisfactory safety rating from the U.S. Department of
Transportation.\5\ Applicants also certify that they have sufficient
insurance coverage and that neither Laidlaw nor any of the carriers it
controls is domiciled in Mexico nor owned or controlled by persons of
that country. Additional information may be obtained from applicants'
representative.
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\5\ It appears that Laidlaw's affiliates are unrated, except for
Greyhound Canada, Roesch, Safe Ride, and Willett, all of which have
satisfactory safety ratings. One of Greyhound's affiliates,
Gonzales, however, has a conditional safety rating. Americanos and
Amigos are unrated, and the remainder have satisfactory safety
ratings.
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Under 49 U.S.C. 14303(b), we must approve and authorize a
transaction we find consistent with the public interest, taking into
consideration at least: (1) The effect of the proposed transaction on
the adequacy of transportation to the public; (2) the total fixed
charges that result from the proposed transaction; and (3) the interest
of affected carrier employees.
On the basis of the application, we find that the proposed merger
is consistent with the public interest and should be authorized. If any
opposing comments are timely filed, this finding will be deemed
vacated, and unless a final decision can be made on the record as
developed, a procedural schedule will be adopted to reconsider the
application.\6\ If no opposing comments are filed by the expiration of
the comment period, this decision will take effect automatically and
will be the final Board action.
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\6\ Under revised 49 CFR part 1182, effective October 1, 1998,
as adopted in Revisions to Regulations Governing Finance
Applications Involving Motor Passenger Carriers, STB Ex Parte No.
559 (STB served Sept. 1, 1998), a procedural schedule will not be
issued if the Board is able to dispose of opposition to the
application on the basis of the comments and applicants' reply.
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Board decisions and notices are available on our webside at
``WWW.STB.DOT.GOV.''
This decision will not significantly affect either the quality of
the human environment or the conservation of energy resources.
It is ordered:
1. The proposed merger is approved and authorized, subject to the
filing of opposing comments.
2. If timely opposing comments are filed, the findings made in this
decision will be deemed vacated.
3. This decision will be effective on February 1, 1999, unless
timely opposing comments are filed.
4. A copy of this notice will be served on: (1) the U.S. Department
of Justice, Antitrust Division, 10th Street & Pennsylvania Avenue,
N.W., Washington, DC 20530; and (2) the U.S. Department of
Transportation, Office of Motor Carriers-HIA 30, 400 Virginia Avenue,
S.W., Suite 600, Washington, DC 20024.
Decided: December 9, 1998.
By the Board, Chairman Morgan and Vice Chairman Owen.
Vernon A. Williams,
Secretary.
[FR Doc. 98-33460 Filed 12-16-98; 8:45 am]
BILLING CODE 4915-00-P