The Staples acquisition of Office Depot is far from being a done deal, it appears.
The most recent rumblings on the move of Staples to acquire Office Depot hasn't settled well with antitrust regulators, which may cause the FTC to delay its ruling on the deal, Reuters reported. Representatives from Staples, Office Depot and the FTC have not provided public comment on the matter. Staples is reportedly looking to buy Office Depot for $6 billion.
Reports indicate that the FTC will have its decision by Dec. 8. But federal regulators are also allegedly looking to block the acquisition, New York Post reported.
“They are ramping up for litigation," an anonymous source told NYP.
The start of this issue stems back to February and has been anything but smooth since then. Facing pressure from online competitors in the office supply industry, Staples and Office Depot agreed months ago to merge, pending SEC approval. The acquisition had been in the works since last September and was unanimously approved by both companies’ boards after being encouraged to do so by numerous hedge fund managers.
According to Staples, the new merger came after the successful consolidation of Office Depot and OfficeMax and will re-enforce the Framingham, Massachusetts-company’s scale and credibility in new categories of office supply, such as delivery and online purchases, as well as a new multi-channel copy and print business. By diversifying, Staples hopes to be able to compete more effectively versus “large, diverse sets of competitors,” naming a growing online retail market for Staples’ services and products, especially with the more recently launched Staples Exchange eCommerce platform.
Currently, the FTC commissioners' votes appear to be split, according to NYP. That leaves it up to Staples to convince the opposing commissioners to switch their votes. The FTC's concerns center on the fact that Staples and Office Depot would be the only national suppliers for corporations, which could mean a merger would form a monopoly. Concerns among customers suggest that they fear prices would jump due to lack of competition.