FTC Could Put a Stop to $6.3B Merger

Photo by Anthony92931

We may see a massive $6.3B Office Depot-Staples merger go through if the companies can negotiate a deal to appease the FTC’s antitrust concerns. On Friday, they said they would comply with the 45-day wait period needed for the FTC’s “second request for information,” and this may mean that a deal is in the works. The two have few true competitors—analysts only consider W.B. Mason, Amazon and Walmart real threats, and W.B. Mason’s $1.5B/year government and company contracts pale in comparison to Staples and Office Depot’s double-digit billions—so no one is doubting concerns of a monolithic office supply merger. Regardless, Staples is willing to break off the contract in order to divest $1.25M or more to make the deal happen, but analysts wonder if any deal would be worth it. Another potential deal could include Office Depot’s sale of OfficeMax, which it absorbed in 2013. But some worry that the FTC may crush the merger wholesale until a new merger format can be thought up. [SS]

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