Staples inks deal to buy Office Depot for $6.3 billion

“There are plenty of places to buy a dozen pens. Need 12,000, though, and the options dwindle,” Drew Fitzgerald and Liz Hoffman report for The Wall Street Journal. “That distinction between the retail market for everyday office and school supplies and the big business of supplying corporate and government clients under contract could loom large as regulators weigh Staples Inc.’s $6.3 billion deal to buy rival Office Depot Inc.”

“The merger, unveiled Wednesday, would take the U.S. down to one chain of office-supply superstores from three in just a couple of years. The Federal Trade Commission waved through Office Depot’s acquisition of OfficeMax in 2013. The current deal may get a closer look,” Fitzgerald and Hoffman report. “Leo Meehan, chief executive of closely held W.B. Mason Co., a regional office-supplies seller, said it was too soon to tell whether the merger would hurt his business. W.B. Mason does about $1.5 billion in business a year, about a third of which comes from large buyers, including government clients, Mr. Meehan said. ‘Now we’re just going to have this one monstrous competitor,’ he said. But ‘every time there’s been a merger, each one has over time brought opportunity for us. One way or another, we’ll be out there trying.'”

MacDailyNews Take: Now, there’s a guy with a proper attitude!

“Investors appeared to be betting the deal will get real scrutiny from regulators. Office Depot shares closed up 2.2% at $9.49, well below the deal’s value of $10.91 a share at Staples’ closing price Wednesday. Staples’ shares fell 12% to $16.73,” Fitzgerald and Hoffman report. “Both are already among the 10 biggest online retailers, with Staples coming in No. 3 behind and Apple Inc., and Office Depot at No. 9, according to Internet Retailer, a trade publication.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]

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  1. These kind of deals are not normally in the best interest of the customer, the communities served by the combined company or the employees. The entire motivation is to eliminate competition which is supposed to be the essential ingredient in capitalism.

    As to the canned response that competition will magically pop up: it simply is not true on the scale of huge companies.

    Comcast is the most despised Cable/ISP company in the United States with customer service, second only to Time Warner Cable. Where has the ‘free market’ created a competitor for these poorly run companies? Comcast just keeps getting bigger by buying laws that restrict community broadband, buying laws that inhibit electric utilities from offering broadband, buying politicians willing to blow up the FCC to keep their special position: a company organized like a utility that is not regulated like a utility.

  2. Staples just closed a store in Fremont CA that had been open for probably only 5 years. Anytime I went in there it was empty.
    Nearest Office Depots /Staples are now in the neighboring cities.
    Can’t see any good coming out from the merger.

  3. I was listening to a news report about this *second* attempt by Staples to buy Office Depot (who already bought OfficeMax).

    This buy out was already DENIED on monopolist grounds. But Staples is ‘DEMANDING’ that their second attempt at monopolization be approved. Apparently, being more adamant is supposed to help.

    My response: Yesterday I killed my email subscription to Staple’s list serve. Tell hell with them. No monopolies. No how. I won’t be shopping at Staples again. 😛

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