Staples, a main competitor of Office Depot, has struck a deal with the company to purchase the chain for about $6.3 billion, effectively becoming the only major chain in the US office-supply industry.
The deal was agreed upon as pressure from an activist investor called Starboard Value, eventually led to the merger.
The combination would create a company with revenue of around $39 billion and combine thousands of stores across the United States.
Possible disagreement may come from the Federal Trade Commission regarding antitrust rules and regulations. However, the FTC has been fairly lax in allowing merges with the growing online competition.
“The competitive environment has changed, but the government will look carefully into the effects on prices,” Erik Gordon, a professor at the University of Michigan said, “The merger is a game changer.”
It won’t be easy of course. OfficeDepot and OfficeMax has merged not too long ago in order to provide more competition against Staples. The government may not agree to a merger in such a short amount of time.
OfficeDepot will have to convince the government that the merger will have no affect on prices, as competition from Wal-Mart and other online suppliers will be present.
Do you feel that the merger will help bring better prices for the customers? Or do you feel that it is a starting of a new trust that may lead to more problems.
Leave your thoughts below!