Staples makes US$2.1 billion bid for rival Office Depot
In this article (4)
Office supplies retailer Staples has made an offer to buy Office Depot owner ODP Corp for US$2.1 billion in cash, nearly five years after its second takeover effort was rejected.
The US Federal Trade Commission blocked Staple’s $6.3 billion offer in 2016, saying a merger between the two could reduce competition for nationwide contracts for office supplies.
At the time, the Australian Competition and Consumer Commission (ACCC) gave its tick of the approval of Staples’ proposed acquisition of Office Depot, which trades locally as OfficeMax.
The two companies agreed to merge in 1996, but the deal was put to rest as a government lawsuit argued the move would have meant higher prices for pens, paper, and other office supplies.
Staples was a public company when it attempted the acquisition. It went private in 2017.
Staples said it is prepared to take “all necessary measures” to divest ODP’s B2B Business to a FTC-approved and qualified buyer.
USR Parent, or Staples, said it would offer $40 per for each ODP share, a premium of 8.2 percent to Friday’s close.
ODP’s shares rose about 11 percent to $41 before the opening bell.
Questions & Answers
Q.Why was Staples’ previous attempt to buy Office Depot blocked?
Why was Staples’ previous attempt to buy Office Depot blocked?
The US Federal Trade Commission blocked the 2016 offer because it believed a merger could reduce competition for nationwide office supplies contracts. A government lawsuit also argued the move would lead to higher prices for consumers.
Q.What is Staples proposing to do differently this time to address competition concerns?
What is Staples proposing to do differently this time to address competition concerns?
Staples has stated it is prepared to divest ODP's B2B Business. This divestment would be to an FTC-approved and qualified buyer, aiming to mitigate competition issues.
Reader pulse
Is Staples' renewed bid a smart move?
19,343 votes so far