Move expected by some to shake up office supply sector
NEW YORK—Office Depot Inc and OfficeMax have agreed to merge in an all-stock deal that would transform the $21.2 billion office supply retail sector. A news release stated that the combined company, which would have had pro forma combined revenue for the 12 months ended December 29, 2012 of roughly $18 billion, will also have improved financial strength and flexibility, with the ability to deliver long-term operating performance and improvements through increased scale and significant synergy opportunities.
“Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors, and increase stockholder value,” said Neil Austrian, chairman and CEO of Office Depot. “Office Depot and OfficeMax share a similar vision and culture, and will greatly benefit from drawing on the industry’s most talented people, combining our best practices and realizing significant savings. We are confident that this merger of equals represents a new beginning for our two companies and will allow us to build a more competitive enterprise for the long term.”
Boca Raton, Florida-based Office Depot Inc. and Naperville, Illinois-based OfficeMax say holders of OfficeMax shares will receive 2.69 shares of Office Depot for every OfficeMax share they own. That’s equal to about $13.50 per share, giving the deal a total value of about $1.2 billion. Analysts say if the deal closes it would likely benefit the largest office supply player Staples Inc because the combined entity will likely close stores.