January 13, 2016
The news outlet reported that the FTC reportedly has “no interest in allowing” Staples to acquire Office Depot, nor does it have any “interest in settling with Staples on the current terms”. The three different sources “on different sides of the case” gave the same perspectives, with one noting that while “Staples and the judge want a settlement”, the US government “does not want one”.
More recent developments seemed to suggest “renewed optimism” in the merger being granted, with the FTC’s lead attorney Tara Reinhart telling US District Court Judge Emmet Sullivan that talks “were continuing”, but another of the sources pointed out that “the odds of a settlement are near zero”.
Sullivan added recently that he “expects to decide by May” whether to allow the FTC to block the merger, and one of the sources commented that the company’s latest offer to divest $1.25 billion (€1.14 billion) of commercial contracts in exchange for approval of the $6.3 billion (€5.8 billion) merger “makes sense”, but the FTC rejected this, leaving Staples to call it “misguided”.
The offer was an upgrade from a previous offer of $600 million (€558 million), after which the FTC filed a lawsuit to block the deal, and regulators are said to believe the latest offer “does not amount to much, since they are one-year contracts that Staples can win right back”. In turn, the FTC’s main concern is said to be that “national corporate customers only buy office supplies through Staples or Office Depot, and eliminating one could cause prices to rise”.
The two companies previously called the decision to block their merger “flawed”, with a court case likely in March 2016, while the European Commission is also investigating the deal, and has set the deadline of 16 March for a decision, and it has already been approved in Australia, New Zealand and China.
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