An overwhelming majority of Office Depot, Inc. ODP shareholders have approved the company’s takeover by Staples, Inc. SPLS. Nearly 99.5% of the shareholders were in favor of the acquisition by Staples at Office Depot’s Annual Meeting of Shareholders held on Jun 19.
Office Depot is likely to release the final ballot count on Jun 22 through a regulatory filing. The transaction remains subject to regulatory approval. Staples and Office Depot have been working in tandem with the U.S authorities and Staples already has obtained the debt to finance the $6.3 billion transaction.
Moreover, the company has been working with authorities across the European Union, Canada and Australia, to close the transaction by the end of this year. The merger has already received approval from the Chinese and New Zealand authorities.
Earlier this year, Staples had announced that it will acquire rival Office Depot in a multi-billion dollar deal. Together, the two companies would create a retail chain with approximately $39 billion in revenue and thousands of stores. The idea of this merger was not a new one as the same was proposed 18 years ago but dismissed by the Federal Trade Commission at the time, after being slammed as anticompetitive.
However, a changing consumer landscape is pushing it forward this time, as office supply retailers are facing more and more competition from companies like Wal-Mart Stores Inc. WMT and Amazon.com Inc. AMZN.
Staples expects the merger to generate annualized cost synergies of $1 billion by fiscal third year, after the deal is closed. However, the company expects to incur nearly $1 billion in one-time expenses to realize the above-mentioned synergies.
At present, Staples and Office Depot carry a Zacks Rank #3 (Hold).
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