Staples and Office Depot talks to merge into one big super office supply store. There is no guarantee a deal will be reached but “people familiar with the matter” say it is a done deal. We don’t know the price of the deal or how it was structured at the moment. Just to get an idea of the price tag of what a deal could be worth. Office Staples has a market value of over $11 billion. Office Depot on the other hand is only about $4.1 billion.
Activist investors have at late been able to flex their muscle to get companies they invest in to do their will. Just a few months ago activist investor Starboard Value demanded that the two companies to merge. They seemed to have gotten their way. Starboard stated that a combined company would lead to greater savings.
A merger would be better able to take on the big boys of the online world like Amazon.com while offering some protection against and the retail monster Wal-Mart. It will be interesting to see will this merger get by the antitrust regulators this time. Staples tried to buy Office Depot in 1997 but was told no because citing antitrust concerns. It could be that times have changed enough to let it happen this time. After all, the FTC did approve the purchase of OfficeMax by Office Depot for just $976 in 2013.