US: Staples, Office Depot stocks plummet after merger’s demise

Shares of Staples and Office Depotnosedived Wednesday after their $6.3 billion merger deal collapsed.

Investors flocked away from both retailers after the office supply giants scrapped their deal in the wake of a federal judge’s decision to issue a temporary injunction blocking the accord. The judge ruled on objections raised by the Federal Trade Commission.

Office Depot shares plummeted 38.18% to $3.77 in afternoon trading, while Staples shares fell 16.55% to $8.65.

The merger deal’s demise casts a cloud of uncertainty over the next steps for each retailer. The Obama administration had challenged the deal on anti-competitive grounds.

It was the second time in 19 years that the companies called off a merger after federal regulators raised antitrust concerns.

Debbie Feinstein, director of the FTC’s competition bureau, characterized the ruling as “great news for business customers in the office supply market.”

“This deal would eliminate head-to-head competition between Staples and Office Depot and likely lead to higher prices and lower quality service for large businesses that buy office supplies,” said Feinstein.

Full Content: USA Today

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