Published On: Wed, Dec 9th, 2015

Feds Sue to Block Merger of Boca Based Office Depot, Staples

By CRA News Service

The likelihood of Office Depot leaving Boca Raton is looking slimmer as the Federal Trade Commission filed suit earlier this week to block a planned $6.3 billion merger with giant Staples.

“The Commission has reason to believe that the proposed merger between Staples and Office Depot is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies,” FTC Chairwoman Edith Ramirez said in a statement. “The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customers.”

The merger would lead to higher prices and reduced quality, the complaint alleged in the administrative suit filed on Monday.

The anti-competition watchdog also asserted that entry or expansion into the market by other office supplies vendors, manufacturers, wholesalers, or online retailers would not be timely, likely, or sufficient to counteract the anticompetitive effects of the merger. Further the purported efficiencies would not offset the likely competitive harm.

If the merger is approved, hundreds of jobs in Palm Beach County would be lost. Last year, the city, county, and state struck a $5 million incentives deal with Office Depot to bring and keep jobs in the area over the next five years.

If Office Depot, which has roughly 2,000 employees in Boca Raton, it has to pay back that money.

Staples based in Framingham, Mass., is the world’s largest seller of office products and services. Both companies are each other’s closest competitors in the sale of items such as pens, sticky notes, copy paper and paper clips, and are often the top two bidders for the business of large companies, the regulator said in the suit.

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

The two companies announced plans to combine in February in a deal that was expected to be closely scrutinized by regulators concerned with antitrust issues. The FTC previously blocked plans by the two to merge in 1997.

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