Staples And Office Depot Circling Each Other Again With Merger In Their Eyes

Image courtesy of Mike Mozart and frankieleon

From 2015 to 2016, retail-watchers carefully tracked the proposed merger of Staples and Office Depot, which itself had recently acquired OfficeMax. The Federal Trade Commission ultimately didn’t bless the deal, but the two chains have come back with a new idea: What if Office Depot were to acquire just the retail portion of Staples?

The New York Post reports that’s what the two companies are working on right now, according to mysterious “sources.” Instead of two competing retail big-box office chains, spinning off the consumer-facing part of Staples and selling it to Office Depot would mean just one big nationwide chain under the Office Depot name.

That might meet with the FTC’s approval. Back in 2016, a federal judge ruled in favor of the Commission, which argued that the storefront operations of both chains weren’t the as much of an antitrust issue. Ordinary shoppers can buy the merchandise available at office supply stores from a variety of retailers.

The companies’ large corporate clients, however, don’t have that choice, and the commissioners decided that it would be unwise to merge the only two national office supply vendors.

Earlier this summer, Staples sold itself to a private equity firm, and that firm had the idea to split up the business into three parts, separating its retail operations, its commercial supply operations, and its international operations.

When Staples was up for sale, a buyer that was reportedly Office Depot bid somewhere between $625 million and $700 million for the company’s North American retail operations.

The two companies tried to merge in 1997 as well as in 2015, but retail consumers were an actual concern 20 years ago. That’s not so much the case now, and maybe the two superstore chains are closer to being two metaphorical penguins afloat on tiny icebergs in a vast and cruel and rapidly changing retail sea, as the companies argued to the FTC while trying to save their proposed merger in 2016.

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