Staples and Office Depot Finalize Merger Plans

It’s been on, then off, and now it’s back on again as Staples, Inc. and Office Depot, Inc. complete their financing arrangements and announce the extension of their merger agreement to May 16, 2016.

The extension allows for the completion of ongoing federal district court litigation with the Federal Trade Commission (FTC). Earlier, both companies agreed to delay closure of the merger upon the request of the FTC.

On February 4, 2015, Staples and Office Depot entered into a definitive merger agreement to combine as a single company.  The newly combined company expects to deliver more than $1 billion of annualized synergies net of investments to provide increased value to customers by the third full fiscal year.

Recently, large corporate contract business and related assets, worth more than $550 million were are sold by both companies to Essendant. The latter will pay Staples approximately $22.5 million. The transaction is subject to the successful completion of the proposed merger of Staples and Office Depot, as well as other customary closing conditions.

According to officedepot.com, the commercial business and assets being stripped off involve accounts held by Staples and Office Depot acting as wholesalers to minority owned office supply resellers.

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