Just because the Federal Trade Commission went to court in an effort to block the pending merger of Staples and Office Depot, doesn’t mean the companies are putting the mega-deal behind them. In fact, the office-supply chains have extend the contract for their proposed $6.3 billion merger to allow more time to placate antitrust regulators.
Office Depot and Staples extended their agreement, originally set to expire on Feb. 4, to May 16, the Sun Sentinel reports.
The extension was crafted in order to allow the FTC’s lawsuit, which will be heard on May 10, to be settled. However, there remains a possibility that the trial could be canceled if regulators and the office-supply companies strike a deal or Office Depot and Staples pull out of the merger.
“We are committed to completing this transaction and look forward to a full and impartial judicial review,” Ron Sargent, chief executive of Staples, said.
In December, the FTC filed a lawsuit to block the merger based on the findings that a merged company would reduce competition nationwide in the market for “consumable” office supplies – pens, paper, sticky notes, etc. – sold to large business customers.
Because Massachusetts-based Staples – the world’s largest seller of office products and services – and Florida-based Office Depot are each other’s closest competitors in the sale of office supplies to large business customers, the agency believe that the proposed merger would “eliminate beneficial competition that large companies rely on to reduce the costs of office supplies.”
The FTC’s lawsuit is the second time the FTC has taken action to ban the marriage of the retailers. In 1997, the commission won a ruling from a federal judge blocking a deal.
Staples, Office Depot to extend merger agreement [Sun Sentinel]