Paper cuts

11 May 2016 By Reynolds Holding Follow @holdingren

The office supply chains have shredded a $6.3 bln merger after a judge called a halt amid worries about the impact on big customers. Squelched tie-ups like Sysco’s bid for US Foods portended the result. It’s a blow to the credibility of both sides.

This content is for Subscribers only

Context News

U.S. office supply chain Staples and smaller rival Office Depot said on May 10 that they had terminated their planned $6.3 billion merger after a U.S. federal judge temporarily halted the deal pending a full regulatory review of antitrust issues.

District Judge Emmet Sullivan granted the Federal Trade Commission’s (FTC) request for a preliminary injunction, saying the agency had shown there was a “reasonable probability” that it would “substantially impair competition” for the sale of office supplies to large business customers.

The FTC filed a complaint in December, aimed at stopping the deal, arguing that it was illegal because the two companies were each other’s biggest rival. The commission said the two companies sell 79 percent of the pens, paper, file folders and other “consumable office supplies” sold to Fortune 100 companies.

Shares of Staples and Office Depot fell 4.3 percent and 28 percent respectively in afterhours trading.

Email a friend

Please complete the form below.

Required fields *