Supplies for everyone
Office Depot, OfficeMax (RIP), Staples, miscellaneous independent retailers and Amazon- there is no shortage of office supply stores. However, two may becoming one.
After the Federal Trade Commission (FTC) blocked their merger last year, Staples and Office Depot are thinking about giving it another go.
Forbidden love
Back in 2015, shortly after Office Depot had acquired OfficeMax, Staples and Office Depot attempted a merger that they argued was necessary to keep both companies afloat amidst competition from online retailers like Amazon.
Lawyers for the office supply chains even compared the two companies to penguins trying to stick together on a melting iceberg.
But the FTC had a judge place an injunction on the acquisition amidst antitrust concerns.
Hard pass
Although the FTC wasn’t bothered about the impact of the merger on ordinary consumers – after all, your average Joe can buy a box of highlighters anywhere from the Internet to a dollar store – the agency believed that the two companies combined would create a trust that would wipe out competition for business-to-business sales.
The judge ruled in favor of the FTC, putting the kibosh on the merger.
Still looking for collaborators to help keep itself in business, Staples sold itself to a private equity firm, Sycamore Partners, this past June, for $6.9 billion. The firm has reorganized the company, splitting it into three separate segments for retail, commercial supply, and international operations.
New avenues
That reorganization has reopened the possibility of a merger with Office Depot. Sources told the New York Post that Staples is considering merging just the retail portion of their company with Office Depot, sidestepping the FTC’s concerns that a merger would create a trust that would destroy competition within commercial sales.
Retails sales from Staples would simply be transferred to Office Depot and retail products would be sold to consumers under the Office Depot name and branding.
Long awaited
Staples and Office Depot have been trying to merge as far back as 1997. Under Sycamore Partner’s leadership, they may have found a way to finally make it happen.
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