Judge Rules Against Staples-Office Depot Merger

The bad news hammer (or gavel) has dropped on Staples and Office Depot.

Late in the day yesterday (May 10), a U.S. district judge ruled against Staples’ proposed acquisition of Office Depot, reports Bloomberg, effectively putting to an end the two office supply chains’ long-gestating efforts to merge into one.

On the winning side of Judge Emmet Sullivan’s ruling is the Federal Trade Commission (FTC), which filed a suit arguing that the proposed $6.3 billion deal would violate antitrust laws given that Staples and Office Depot were (and are) each other’s closest competitors and such a merger would significantly reduce competition among other retailers in the corporate office supply industry.

In his order, shares Bloomberg, Judge Sullivan wrote that the FTC met its “burden of showing that there is a reasonable probability that the proposed merger will substantially impair competition in the sale and distribution of consumable office supplies to large business-to-business customers.”

While Sullivan’s ruling, the outlet notes, is specifically an injunction that halts the Staples-Office Depot deal while the FTC challenges the same in administrative court, both Staples and Office Depot have both said that they will cease pursuing any form of the deal in light of the district court’s ruling.

This is actually the second time that the FTC has successfully blocked the two companies from merging, with Bloomberg pointing out that the agency emerged victorious in a 1997 claim that a proposed Staples-Office Depot deal would, also at that time, have violated antitrust laws.