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Staples to buy Office Depot

In a recently announced move, reports indicate that the office supplies giant Staples has purchased a rival office supplies giant, Office Depot. This consolidation is taking place a little over a year since Office Depot merged with Office Max in November of 2013. Staples offered a cash and stock deal of $6 billion.

This move appears to be as a result of the changing way that consumers purchase office supplies. In recent years internet sites, including Amazon and Walmart.com, have received a good portion of business and consumers purchases of office supplies. There has also been a decrease in the use of printers and other traditional office supplies. Staples will keep its corporate office in Massachusetts. Analysts are suggesting that store closings will come soon.

When two or more companies come together to form a new company they can often be better off with their business goals. Companies involved in a merger or acquisition should work to make sure they are on the same page when it comes to the new business and what it should look like. In large mergers, such as this one between Staples and Office Depot, antitrust regulators will be examining the move and the companies will be under close scrutiny.

The purchase of Office Depot by Staples appears to have been spurred by the suggestion of Starboard Value LP, which last month requested the two companies to merge. In a letter addressed to the CEO of Staples, Mr. Starboard suggested he "immediately hire an investment bank and legal advisers to help the board evaluate, structure and execute a transaction with Office Depot".

Source: detroitnews.com, "Staples buys Office Depot for $6 billion", Feb. 4, 2015

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