It’s tough out there for a retail store, especially if you’re a store that’s often mixed up/mashed together with another similar store anyway. So why go it alone, why not embrace your common goal of selling staples and paper? That kind of talk has led to rumors heating up that OfficeMax and Office Depot are considering finally settling down with a nice merger. You know, just because it’s good to just have somebody.
Neither company is getting any younger, and the atmosphere out there for office stores is somewhat bleak. There’s Amazon.com and its behemoth status, gobbling up online customers like nobody’s business; and then there’s Staples, which does about three times as much business as Office Depot and twice as much as OfficeMax.
And also? When’s the last time you realized which retailer you were actually visiting? Was it Max or Depot? Reports indicate the two companies are realizing all of the above and are in talks to discuss a merger.
The Wall Street Journal first reported the two are perhaps teaming up to take on Staples, although those talks are still in the very hush-hush, no sources named phase.
Bloomberg notes that the new company would control almost $18 billion in revenue, which would give it some fire power to battle Staple’s $25 million.
Office Depot has been feeling the heat from one of its biggest shareholders, Starboard, which has been all in favor of anything that would create value for shareholders. Stock has been declining steadily since its peak value in 2006.
Neither side is confirming a wedding is in the works, but there’s still a lot of discussions that need to happen before anything is final. Office Depot declined to comment, but OfficeMax teased media by mentioning the buzz.
“There have been rumors for a while about consolidation in the marketplace,” said a spokeswoman for OfficeMax. “It’s also been our policy not to comment on market rumors or speculation.”
The Federal Trade Commission would also have to give approval as well to make sure the newly formed company doesn’t breach any anti-trust regulations. Because as is the case with mergers, when rivals combine consumers often suffer by way of less price competition.
Office Depot, OfficeMax Said to Discuss Merger Amid Pressure [Bloomberg News]