Office Depot and Office Reportedly in Talks to Merge

Michael Teague |

Office Depot and Office Reportedly in Talks to MergeThe Wall Street Journal reported Monday that the nation’s second and third largest office supply companies, Office Depot (ODP) and Office Max (OMX) respectively, are nearing the final stages of a merger deal. The two companies combined would still trail behind Staples (SPLS) by a considerable margin based on market cap.



With an announcement possible as early as this week, a deal is still not yet finalized and few details are known aside from the fact that the move would take place as a stock-for-stock transaction.  Both companies have yet to comment on the news, but could see considerable cost-cutting benefits as a result of the merger.  Indeed, there are many instances across the country where an Office Max store can be found within a short distance of an Office Depot.  In many instances the two can be found within the same shopping center.  A union between the outlets could provide the possibility of merging locations and consolidating sales.

Taken together, the two companies employ about 68,000 people, and enjoy annual sales of about $18.5 billion.  These combined figures could conceivably become more profitable were they to be reoriented to one single ownership and business model.

A merger could also help both offset the pressure they are currently feeling from discount chain competitors like Wal-Mart (WMT) and Costco (COST), and the increasingly dominant online-retailer Amazon (AMZN), and is yet another indicator that competition from online-shopping is complicating business for a variety of specific retail outlets.

[Image via Flickr]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
WMT Wal-Mart Stores Inc. 76.09 0.59 0.77 4,699,739 Trade
SPLS Staples Inc. 9.20 -0.07 -0.70 2,752,660 Trade
TOS:CA TSO3 Inc. 3.05 0.12 4.10 211,151
AMZN Amazon.com Inc. 978.54 -15.44 -1.55 2,997,559 Trade
COST Costco Wholesale Corporation 159.49 -0.71 -0.44 4,498,748 Trade
ODP Office Depot Inc. 5.59 0.01 0.18 2,559,159 Trade

Comments

Emerging Growth

NXT-ID Inc.

Nxt-ID Inc provides products, solutions, and services that have a need for biometric secure access control. Its lines of business include mobile commerce; law enforcement and biometric access control applications…

Private Markets

Ozobot by Evollve Inc

Ozobot is a world leader in compact super intelligent robots that entertain and educate through fun interactive gaming.

Almond Smart Home Router by Securifi

Securifi sells user friendly touch screen routers that also have support for IoT/home automation.Securifi’s Almond revolutionized wireless router setup with its easy to use Touchscreen Interface in 2012. Now our…