Everything You Need To Know About The Staples/Office Depot Merger
Fast Facts:
- Staples proposed a $6.5B merger with its rival Office Depot in February 2015.
- Staples and Office Depot are the two biggest B2B office suppliers in the US.
- The Federal Trade Commission sued to block the merger over antitrust concerns.
- The European Commission signed off on the deal, despite initial reservations similar to the FTC's.
- Staples has tried several avenues to try and appease the FTC, including selling assets and pointing to Amazon as a competitor.
The Deal Proposal: 20 Years In The Making
That's right, this deal is old news—Staples originally proposed this very same merger back in 1997, and the FTC shut it down to preserve competition in the office supply market, citing lower office supplies prices in areas where both companies operated. So the retail giants decided on a second go-round in February 2015—and the FTC said essentially the same thing.
Europe Says Yes
Despite their stateside rejection, Staples and Office Depot trudged onward. The pair got the go-ahead across the pond from the European Commission after agreeing to sell off some of Office Depot's European assets—including its entire Swedish operation—to ease antitrust worries. But what works in Europe doesn't always cut it in the states. The companies offered to dump US Office Depot assets that produce $1.25B in revenue...but the FTC still said no.
Failed Attempts To Sweeten The Deal
Staples and Office Depot also offered to sell $600M in corporate contracts to Essendant, an Illinois-based competitor, but still, no dice from the FTC. Now Staples has filed a motion to compel Amazon to turn over paperwork to the FTC, which the office supplier hopes will prove that Amazon represents a major competitor of theirs (the one company that wants to compete with Amazon). Staples CEO Ron Sargent says the company is working on a Plan B in case the merger continues getting blocked. (Pressing its famous "easy" button?)
