Business
Shares of Staples Fall on $6.3B Bid for Office Depot
In this May 17, 2011 file photo, a Staples sign is displayed on the front of a Staple store, in Portland, Ore. (AP Photo/Rick Bowmer, File)
(USA Today) – Office-supply chain Staples agreed to buy its sole remaining competitor, Office Depot, in a $6.3 billion-deal that would create one mega-office-supply chain.
But fears of anti-trust opposition sent shares of Staples plummeting 11%, despite applause from investors for the proposal.
The merger, which vows cost savings of $1 billion after closing, must be approved by the Federal Trade Commission. And while the regulator passed a recent marriage between Office Depot bought OfficeMax in 2013, investors are jittery that the FTC could raise questions about joining the last two surviving office supply chains.
“I think they have to fight it,” Staples co-founder and former CEO Tim Stemberg said of the FTC’s potential view of the merger. Staples faces “potentially a long and nasty legal skirmish” to get it done, Stemberg said on CNBC.
