Office Depot shareholders approve Staples acquisition
After announcing that it planned to sell its assets to Staples back in February, office supply chain Office Depot has finally gained the approval of its shareholders to go ahead with the merger. However, nothing is definite yet, as the two companies still have to get permission from the Federal Trade Commission (FTC) before the merger can be completed, and the commission has previously declined to give the go-ahead for the two companies to merge.
Discussions about the merger began last September, and on February 4, 2015, Office Depot announced that Staples would acquire all of its outstanding shares. The decision to merge was made on the basis of rapid technological changes in the workplace that have rendered many office supply products obsolete, as well as increasing competition from e-commerce companies like Amazon. The two companies believe that merging will make them better able to transform themselves and continue to provide valuable services in this rapidly changing industry. Now, 99.5 percent of Office Depot stakeholders have voted to allow the merger.
"This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment. We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention which is focused on driving growth in our delivery businesses and in categories beyond office supplies," said Staples CEO and chairman Ron Sargent in a press release.
However, the merger still needs FTC approval, which is uncertain due to monopoly concerns. Office Depot already acquired OfficeMax last year, so according to the National Law Review, "it isn't clear whether further consolidation of competitors will win approval."
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