Acquisition expected between Staples and Office Depot

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Acquisition expected between Staples and Office Depot

Popular office supply stores in Texas may go through some changes as Staples is buying Office Depot for around $6 billion. Office Depot is the second-ranked office supply retailer while Staples is the first, and this Feb. 4 announcement is not very unexpected, as big-box retailers must act to stay competitive in a market where online shopping has become popular.

Consumers now have many options when it comes to purchasing supplies, and there is also less demand for these products since improved technology makes it possible to work anywhere via smartphone. Staples has responded to changing needs by selling items online and focusing on services targeted to some small businesses, but brick-and-mortar stores continue to struggle while online office supply sales grow.

This potential buyout means both stores will no longer have to compete with each other. Office Depot shareholders and the Federal Trade Commission must both approve the deal however, and antitrust regulators blocked a deal between the companies more than a decade ago.

This proposal follows a deal between Office Depot and OfficeMax as the former acquired the later for $1.2 billion in 2013, and this merger contributed to Office Depot’s rising sales in 2014. Acquisitions and site closings may become common as a representative of a retail consultancy firm thinks small stores with ties to the internet are the future of retail.

Business decisions are seldom simple; mergers and acquisitions involve many considerations and take time and effort to complete. Both companies will likely have several legal matters to discuss, and outside forces like the FTC would probably have an interest in the proceedings. An attorney might be helpful when conducting due diligence, crafting a proposal or negotiating a merger.

Source: ABC News, “Staples Buys Office Depot for $6B to Keep Pace With Change,” Michelle Chapman and Anne D’Innocenzio, Feb. 4, 2015


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