Connecticut Attorney General Announces Multi-State Agreement Involving Largest School Bus Company Merger

September 26, 2007

Connecticut Attorney General Richard Blumenthal today announced a multi-state antitrust settlement involving the merger of the two largest school bus transportation providers in the United States - FirstGroup and Laidlaw International, Inc.

"Today's settlement helps protect affordable school bus service - in the shadow of a newly merged mega company that may threaten competitors," Blumenthal said. "Without these measures, the combined company may inhibit or impede competition - which is key to lower prices and better service on school bus service. Our coalition of states aggressively investigated and negotiated this agreement to ensure a more level playing field."

The 11 states, including Connecticut, filed a lawsuit and settlement in federal court in Massachusetts today alleging federal and state antitrust violations. The settlement requires court approval.

The settlement, providing $1.1 million to the states for legal fees and costs, imposes significant conditions to protect against future anticompetitive practices by the newly merged bus company, including measures prohibiting FirstGroup and its subsidiaries from using their clout to bully school districts into unreasonable contracts under threat of withdrawing a bid.

The settlement also imposes Connecticut-specific measures. One requirement is that districts having a contract of 100 buses or more, where either of the merging companies was the incumbent, but not the winning bidder, the merged company must make available the buses it used exclusively or primarily to service those routes available to the winning bidder at commercially reasonable terms. Nor can they prevent drivers who exclusively or primarily serviced those routes from working for the winning bidder.

"The agreement shows that we will protect competition - and competitors - for the benefit of taxpayers and schools," Blumenthal said. "Beyond our primary goal of preserving competition, the agreement also protects the company's employees in some contracts. Even when they do not win the bid, the merging companies must provide to competitors buses and enable employees to drive them - under reasonable terms - if they had contracts in bigger markets."

FirstGroup has also agreed to provide the attorney general 60 days advance notice of future acquisitions of school bus service companies active in Connecticut.

States also involved in this settlement are Alaska, California, Illinois, Maine, Massachusetts, Minnesota, Missouri, New Jersey, Rhode Island and Washington.

Blumenthal thanked those in his office who worked on the investigation - Assistant Attorney General Arnold Feigin, and Paralegal Holly MacDonald under the direction of Assistant Attorney General Michael Cole, Chief of the Attorney General's Antitrust Department.

Source: Connecticut Attorney General