Staples Gets EU Clearance for Office Depot Deal on Asset Saleby
Companies agree to sell Swedish operations, contract business
$6.3 billion deal still needs approval from U.S. officials
Staples Inc.’s plan to buy Office Depot Inc. for about $6.3 billion was cleared by European Union regulators after the company agreed to sell a contract distribution business in Europe and its operations in Sweden.
The European Commission said the commitments remove any between the merging companies in all markets where concerns were raised, ensuring that an important alternative will remain available. The deal still needs approval from U.S. regulators, where it has already been challenged court.
“The substantial remedies package offered will ensure that effective competition is maintained, in particular on the EU’s international office supplies market,” EU Competition Commissioner Margrethe Vestager said in an e-mailed statement Wednesday.
Approval of the deal by the EU might be moot since in the U.S., the Federal Trade Commission sued the retailers in December, claiming the tie-up would squelch competition and raise prices for corporate customers that buy under contract. The agency is seeking a federal-court order to block the deal pending a trial at its in-house administrative court. That hearing is scheduled to begin in March.
The deal, announced in February, would combine the two biggest office-supply retailers in the U.S., reducing the industry to a single major chain. The transaction is part of a merger wave sweeping across industries from beer to drug stores to pharmaceuticals that’s under scrutiny from antitrust officials around the world.
The merger would create a retail chain with about $39 billion in revenue and thousands of stores. The two companies agreed to the transaction following pressure from activist investor Starboard Value.
Staples can only implement the acquisition of Office Depot once the commission has assessed and approved the divestiture to a suitable purchaser, the EU regulator said.
Staples rose 0.1 percent to $8.41 at the close in New York, while Office Depot climbed 2.3 percent to $5.03.