Staples-Office Depot deal off?

September 22, 2015

The proposed merger is in danger of collapsing after hitting a wall with Federal Trade Commission (FTC) Bureau of Competition head Deborah Feinstein, a source has said.

The New York Post reported hearing from an informant that “her decision is very, very important”, with her and her staff due to make a recommendation to the FTC commissioners in the next few days.

The commissioners need to rule by 12 October on the deal, although Staples may still ask for a deadline extension. The source added that “the chances are very low the commissioners would go against her”, possibly going against the FTC’s Bureau of Economics, which was not as eager to stop the merger.

It was also said that the merger would result in higher prices for national companies that derive their prices exclusively from the two companies, while hedge funds were full of rumours on Monday that Staples had offered a solution to the FTC including selling a business to clear the deal, following a reference in a Postal Workers Union white paper on the merger.

A source close to Staples said the rumour involved the retailer selling a division of the former OfficeMax business to secure the deal, although unaffiliated sources close to the situation said it would likely not make much of a difference.

The New York Post reported another source as saying: “The staff can get set in their ways. I think there is a value to reaching an agreement on a divestiture earlier.”

An industry consultant is further quoted as having said: “The FTC is determining what the prospective competitive environment will be after ODP and Staples merge. The FTC may believe the pro-forma company’s behavior will change post-close once the competitive pressure between the two main rivals will be substantially lessened.”

 

Categories : City News

Tags : Office Depot Staples USA