For its part, Republic's directors are keen to keep their company independent and to proceed with a plan to acquire AWI. Republic agreed in June to buy AWI in a US$ 6.1 billion (Euro 3.9 billion) stock transaction that would make it North America's second-largest refuse haulier in revenue terms. According to Republic, WMI cannot buy more than US$ 63.1 million (Euro 40 million) of its shares on the open market without first receiving US antitrust approval.

Waste Management's Chief Executive Officer David Steiner is understood to be attempting to maintain the company's size advantage in an industry affected by rising fuel costs and a weakening economy that has reduced demand for construction waste removal. Hauliers have been forced to cut unprofitable routes and to implement fuel surcharges in order to remain competitive.

WMI is operating in all but one of Republic's 20 markets, which are mostly in the southern USA, making it easier to integrate operations and cut overlapping administrative costs, Mr Steiner has said in an interview. 'This is a series of 20 deals in 20 of our market areas, and so the local management is able to get those synergies out very easily,' he commented. A link-up with Republic would create US$ 150 million (Euro 95 million) in synergies within a year, according to Waste Management. The acquisition would create a company which would have recorded sales of US$ 16.5 billion (Euro 10.4 billion) last year compared with US$ 9.24 billion (Euro 5.85 billion) for a Republic-Allied merger.

Republic 'will carefully review the proposal received from Waste Management consistent with its fiduciary duties', according to a company statement.