Staples says FTC rejected updated offer of Office Depot

Despite the discussions, and the rejection, FTC has not made any counteroffer, Staples said.

Staples maintains that the acquisition would benefit customers as well as employees and shareholders. The companies released a statement saying, “The FTC’s decision is based on a flawed analysis and misunderstanding of the intensely competitive landscape in which Staples and Office Depot operate”. The industry had already undergone a notable consolidation with the merger two years ago of Office Depot and OfficeMax.

Staples offered to give up $1.25 billion in commercial contracts to acquire Office Depot, but federal regulators have rejected it, the company said Monday. A previous proposal from Staples offered to shed $500 million in contracts.

The potential merger of Staples and Office Depot was first announced in February. Shares of King closed at $17.91 yesterday, $0.09 below the proposed buyout price of $18.00, as reported by the Inquisitr. FTC attorney Tara Reinhart said at a court hearing last week that the FTC is concerned the companies are merely transferring contracts and not divesting physical assets. Staples said it is willing to continue negotiations with the FTC to reach a settlement that addresses the agency’s concerns. Should it prove necessary – and now it sounds like it will – Staples has said it’s willing to fight to keep this deal alive through litigation. In 1997, the commission was successfully able to win the legal fight when it blocked the merger of the same companies. Staples has projected “net synergies” of more than $1 billion over a three-year integration period as the merged business “aggressively reduces global expenses” and closes redundant stores. Office Depot was down 1 percent to $5.33.