Staples and Office Depot call off $6.3 billion merger after U.S. court says no
On Tuesday night, office supply giants Staples and Office Depot said they will scrap their proposed merger, valued at $6.3 billion when announced last year, after a federal judge in Washington blocked the deal. The Federal Trade Commission had sued the two companies last year, arguing that a combined office-supply behemoth would reduce competition and harm consumers, especially the large businesses that order office supplies in bulk. Staples and Office Depot argued that online retailers like Amazon had changed the retail landscape enormously since the FTC last blocked their plans to merge in 1997.
Judge Emmet Sullivan sided with the FTC, writing in a three-page summary of his ruling that "there is a reasonable probability that the proposed merger will substantially impair competition." The decision was released after markets closed, and Staples shares dropped 10 percent in after-hours trading, while Office Depot's stock dropped 26 percent. This is the latest of several mergers blocked by the FTC in recent months, including Halliburton and Baker Hughes, AT&T and T-Mobile, and Comcast and Time Warner.
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