Staples, Inc. SPLS and Office Depot, Inc. ODP have furnished additional documents and information to the Federal Trade Commission (FTC), complying with the commission’s “second request”.
Both the companies agreed to “substantial compliance” and provided information regarding Staples’ $6.3 billion buyout of Office Depot to the FTC. In addition, the companies have agreed not to conclude the transaction within next 45 days of complying with the FTC’s second request. The companies continue to work in tandem with the Fed regulators.
Earlier, in February, 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 revenues and thousands of stores. This idea is not a new one as the same was proposed 18 years ago but dismissed by the FTC 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 increasing competition from companies like Wal-Mart Stores Inc. WMT and Amazon.com Inc. AMZN.
The transaction has already received regulatory approval from Australia, New Zealand and China while shareholders of Office Depot gave a thumping approval to the takeover at the company’s Annual Meeting of Shareholders held on Jun 19.
At present, both Staples and Office Depot carry a Zacks Rank #3 (Hold).
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