Staples Inc. and Office Depot Merger, Is that Still a Possibility?
Staples, the office supply, furniture and equipment chain retailer has struggled for some time to perk up the revenues as demands decrease for conventional office requirements like filing cabinets and folders. Consumers now prefer to look for cheaper online deals which hurt the demands for conventional office goods.
Staples executives had thought that an acquisition deal for rival Office Depot, would turnaround profits. But regulatory hurdles did not make the $6.3 billion merger deal a near reality. The merger would have reduced operating costs of stores for the company along with distribution and executive office spending.
In case the deal worked out, it was expected to earn revenue of approximately $40 billion yearly for the combined company.
Concerned that the deal will elevate prices for office stationary for corporate customers, the Federal Trade Commission
(FTC) blocked the merger in December. It is not the first instance where the agency has stopped mergers; earlier FTC stopped the likely merger in 1997 between these two companies. However, things are different between then and now; in today's situation competition has increased as online retailers like Amazon along with other retailers have created higher competition in the market.