Framingham-based Staples and its competitor Office Depot are in advanced stages of a merger discussion, according to the Wall Street Journal.
The potential deal’s structure and its repercussions weren’t immediately clear. Sources interviewed by the Journal said the merger wasn’t finalized and may not happen, but if the stores combined, it could bolster their position against e-commerce sites and other retailers, such as Target, that have begun to compete against Staples and Office Depot by offering printing and office supplies.
(Reuters)
Staples has a market value of about $11 billion, while Office Depot has a market value of about $4.1 billion.
Last month, activist investor Starboard Value LP called for the two companies to merge, saying a combined entity would lead to greater savings.
A merger would help fend off intense competition from online retailers such as Amazon.com Inc and big-box chains such as Wal-Mart Stores Inc that sell the same core office supplies, such as paper and ink toner, for less.
The combination of the two would likely get a close look from antitrust regulators, the Journal said.
Office Depot and Staples were not immediately available for comment outside regular U.S. business hours.
I don’t think this merger will fly with anti-trust regulators. Office Depot just completed a merger with Office Max as of last month. With this merger, there would be no more competition left in national chain office supply stores. Wouldn’t be too concerned about this yet.