Office supplies firms to bind in mega merger

 
Adam Hignett
A deal would merge the top two US office supply firms
LEADING US office supply firm Staples is set to acquire Office Depot in a $6.3bn (£3.4bn) deal in the hope of creating a mega corporation with the muscle to take on Wal-Mart and Amazon and giving it pro forma annual sales of approximately $39bn.

The deal will see the leading US supplier of office basics take control of the current number two in the business so will fall under close scrutiny from US antitrust regulators.

Staples has said it is prepared to walk away from the deal if authorities ordered divestitures of more than $1.25bn of Office Depot’s 2014 US revenue.

Staples began discussions on the acquisition in September 2014 and the deal has since met with unanimous agreement from both boards.

Ron Sargent, Staples’ chairman and chief executive officer, said: “This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment.”

Under the agreement, Office Depot shareholders will receive, for each Office Depot share, $7.25 in cash and 0.2188 of a share in Staples stock at closing.

The transaction values Office Depot at an equity value of $6.3bn based on a closing price calculation from 2 February.