Federal Regulators Still Objecting To Marriage Of Staples And Office Depot

Earlier this month, the Federal Trade Commission went to court in an effort to block the pending merger of office-supply mega chains Staples and Office Depot, saying that it would result in too little competition in the market for supplies being sold to businesses. Since then, Staples has tried to revise the deal to make it more palatable, but to no avail.

Staples revealed this morning that its revised plan, which would have involved divesting up to $1.25 billion of commercial contracts, was rejected by the FTC and that the regulator did not reply with a counteroffer.

“The company is still willing to continue negotiations with the FTC to reach a settlement that addresses FTC concerns,” reads a statement from Staples.

At the core of the FTC’s concerns about the $6.3 billion merger is the effect it would have on the market for large businesses to purchase necessary office supplies. Because Staples – the nation’s largest seller of office products and services – and Office Depot are each other’s closest competitors in this arena, the agency believes that the proposed merger would “eliminate beneficial competition that large companies rely on to reduce the costs of office supplies.”

This is the second time that Staples and Office Depot have tried to merge. Back in 1997, when people still went to bricks-and-mortar stores to make most purchases, the FTC successfully sued to block the marriage from getting to the altar.

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.