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Regulators move to stop Staples' deal with Office Depot

 
The Federal Trade Commission’s decision to block the proposed combination of Staples and Office Depot comes 10 months after Staples offered to buy its rival for $6.3?billion. The companies say they plan to fight to preserve the deal. [Associated Press (2009)] 
The Federal Trade Commission’s decision to block the proposed combination of Staples and Office Depot comes 10 months after Staples offered to buy its rival for $6.3?billion. The companies say they plan to fight to preserve the deal. [Associated Press (2009)] 
Published Dec. 8, 2015

For Staples, a merger with Office Depot is anything but easy.

The Federal Trade Commission filed suit Monday to block the planned $6.3 billion combination of office supply companies, saying that it would significantly reduce competition in the market for consumable office supplies sold to large businesses.

Staples, based in Framingham, Mass., and Office Depot, based in Boca Raton, are each other's closest competition in the sale of items like pens, sticky notes, copy paper and paper clips, and are often the top two bidders for the business of large companies, the FTC said in an administrative suit.

In a joint statement, Staples and Office Depot pushed back, saying the regulator's decision was based on "flawed analysis" and a misunderstanding of the competitive forces shaping the office supply industry, pointing to a 2013 transaction between Office Depot and Office Max.

"This merger creates an unparalleled opportunity to better serve customers of Staples and Office Depot," Ron Sargent, Staples' chief executive, said in the statement.

The companies said they would pursue legal options to complete the merger.

Shares of Staples fell more than 8 percent after the FTC's announcement; shares of Office Depot declined 15 percent.

The companies announced plans to merge in February in a deal that was expected to be scrutinized due to antitrust issues. The FTC previously blocked their merger plans in 1997.