Staples, Office Depot Merger Now involving Essendant(United Stationer)

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Staples, Office Depot Merger Now involving Essendant(United Stationer)

 news 2015-10-27 at 12:12:59 pm Views: 734
  • #44171
    Staples, Office Depot Merger Now involving Essendant (United Stationers)
    By David McLaughlin And Christie Boyden

    Staples Inc.’s planned takeover of Office Depot Inc. could overcome U.S. antitrust hurdles with a side deal involving Essendant Inc., according to a report from Bank of America Corp.

    Under a proposal discussed by the Federal Trade Commission, Essendant would buy certain assets from Staples, Bank of America analysts said in a research note, citing a conversation with an industry consultant. The FTC has contacted a corporate purchaser of office products to discuss the idea, which would resolve the antitrust investigation and clear the merger, the analysts said.

    "The FTC is clearly continuing to evaluate the situation, with apparent efforts being made to vet a solution involving a capable industry participant," according to the report.

    Essendant Chief Executive Officer Robert Aiken said on an earnings call last week that he couldn’t comment on a possible settlement in the Staples case but his company "would be open to acquisitions."

    The FTC’s investigation of the Staples takeover, which would unite the No. 1 and No. 2 office supply retailers, has focused on whether the creation of just one national supplier would harm competition and raise prices for large corporate customers who buy under contract.
    Essendant’s Growth

    Essendant, formerly United Stationers, has been consolidating and expanding its wholesale business. The company acquired warehouse distributor Nestor Sales in August and automotive-equipment distributor Medco in October 2014.

    "We have substantial capacity to reinvest in our business, pursue attractive acquisition opportunities and return cash to shareholders,” Aiken said.

    Representatives from Staples and Essendant didn’t immediately respond to calls for comment. Betsy Lordan, a spokeswoman for the FTC, declined to comment.

    Staples shares rose 2.4 percent to $12.92 in New York, while Office Depot climbed 2.3 percent to $7.47.