Regulation

FTC shuts down investigation into Office Depot, OfficeMax merger

150px-US-FederalTradeCommission-Seal.svgThe FTC voted unanimously last week to shut down its seven-month investigation into the proposed $1.2 billion merger of Office Depot and OfficeMax, saying the merger is unlikely to “substantially lessen competition” in the office supply retail sector.

The FTC successfully blocked the proposed merger of Staples and Office Depot in 1997, but the commission said in its statement that the market for office supplies “has changed significantly in intervening years,” resulting in “significant competition” among office supply stores.

In its statement, the FTC said consumers often shop for office supplies beyond office superstores at other stores like Wal-Mart, Target, Costco and Sam’s Club, as well as online retailers like Amazon that have grown significantly to compete with brick-and-mortar office supply stores.

The FTC also discussed the impact of the proposed merger on the sale of office supplies to large customers, such as businesses, on a contract basis. The investigation focused on contracts for multi-regional or national customers, which usually have the most demanding purchase requirements.

Based on collected evidence, the FTC concluded the merger was unlikely to reduce competition in the contract market, citing “little concern from contract customers about the proposed merger.”

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