Should Office Depot merge with OfficeMax?

The two companies are considering joining forces in the face of an existential threat from Amazon

Can two struggling companies become one successful one?
(Image credit: Justin Sullivan/Getty Images (2))

Shares of Office Depot and OfficeMax surged on Tuesday, following a report in The Wall Street Journal that the two companies are in the advanced stages of merger talks. A deal would theoretically help both companies grapple with a host of challenges, from flatlining revenue to Amazon's metastasizing clout within the retail industry.

Analysts have long expected Office Depot and OfficeMax — the second- and third-largest office supply chains in the world, respectively — to join forces. A deal would allow the combined company to cut costs by shuttering overlapping stores and laying off redundant workers. A combined company would also have more buying power over suppliers. And all this could be accomplished without losing many customers or raising prices.

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Ryu Spaeth

Ryu Spaeth is deputy editor at TheWeek.com. Follow him on Twitter.