OfficeMax Incorporated and Office Depot Inc. have entered a
definitive merger agreement under which the companies will combine in an
all-stock merger. The transaction was unanimously approved by the Board
of Directors of both companies and will create a stronger, more
efficient global provider better able to compete in the rapidly changing
office solutions industry. Customers will benefit from enhanced
offerings across multiple distribution channels and geographies.
The merger will combine companies with revenue of approximately $18
billion, compared with Staples' more than $24 billion in sales last
year. The merger is a bid to revive a retailer that has been losing
sales to online rivals and Staples, the largest U.S. office-supplies
chain.
Under the agreement, OfficeMax stockholders will receive 2.69
Office Depot common shares for each share of OfficeMax common stock. The
company's new board will include an equal number of directors
designated by Office Depot and OfficeMax, the companies said. The board
will conduct a search for a CEO, both incumbent CEOs, Neil Austrian of
Office Depot and Ravi Saligram of OfficeMax will be considered.
Both chains have been closing locations and that trend will
accelerate with the merger as about 50% of store territories overlap.
The combined OfficeMax and Office Depot may close or sell as many as 600
locations, giving Staples an opportunity to increase sales in those
areas.
Staples had 2,295 stores worldwide as of January 28, 2012, and is
the second largest online retailer behind Amazon. In statements earlier
this month, Office Depot reported 1,675 global locations and OfficeMax
reported about 900 stores in the U.S. and Mexico.
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