Staples to Acquire Office Depot in $6 Billion Deal
Posted on February 4, 2015
Staples has announced it will acquire Office Depot in a deal valued at $6.3 billion. The deal follows Office Depots acquisition of OfficeMax last February.Staples says it began discussing the Office Depot deal in September 2014. The merged office supply giant would have pro forma annual sales of $39 billion according to a Staples release. Staples says the company would eventually use the name Staples globally for the three brands if the merger is completed. Layoffs and store closings are to be expected with the merger but Staples did not give specifics.
Ron Sargent, Staples' chairman and CEO, says in a statement, "“We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies."
Staples has been increasing its electronic offerings, including laptops, tablets and more. It had some good deals on these types of items on Black Friday last November.
Reuters notes that federal regulators rejected an attempt by Staples to purchase Office Depot in 2007. Staples may decide not to go through with the deal if regulators order divestitures exceeding Office Depot's total 2014 revenues, which was $1.25.
A CNET story says the Staples and Office Depot merger is more likely to go through this time because of language the FTC used during the Office Depot and OfficeMax merger. The FTC said in 2013, "Customers now look beyond office supply superstores when buying office supplies."