It looks like the merger of Staples and Office Depot isn’t going to happen without a court battle.
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Staples will have to do more to smooth government opposition to its proposed takeover of Office Depot after the federal government rejected its latest attempt to win antitrust approval.
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Office Depot, which bought smaller rival OfficeMax in November 2013 without any divestitures, received a buyout offer from Staples again in February this year. The companies released a statement saying, “The FTC’s decision is based on a flawed analysis and misunderstanding of the intensely competitive landscape in which Staples and Office Depot operate”.
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Previously, the commission had moved to file a lawsuit, blocking the consolidation between the top two office supplies companies on December 7.
The Federal Trade Commission sought to block the deal earlier this month believing that a tie up between the last of the major retailers in the sector would throttle competition.
A clause in the original agreement between the two companies stated that if regulators blocked the merger, Staples would pay Office Depot $250 million.
It’s the second time in almost 20 years the agency has sued to stop a tie-up between the two companies. Should it prove necessary – and now it sounds like it will – Staples has said it’s willing to fight to keep this deal alive through litigation. According to the office supply company, the FTC declined the offer without making a counteroffer.
“If it’s just a matter of more assets, then a settlement is likely doable here”, she said. A hearing trial would be held in March in Washington.
“Staples’ Board of Directors and management team have worked tirelessly to complete the transaction”, the company said.
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An FTC spokeswoman didn’t immediately respond to a phone message seeking comment.
