The two giants of the office stationery retail business will become one under a $6.3 billion deal announced today by Staples to acquire Office Depot. Staples has some 1,400 stores across the U.S., while Office Depot has more than 2,000 and serves customers in 57 countries.
“This is a transformational acquisition,” said Ron Sargent, Staples’ chairman and CEO, in a prepared statement. “We expect to recognize at least $1 billion of synergies as we aggressively reduce global expenses and optimize our retail footprint. These savings will dramatically accelerate our strategic reinvention, which is focused on driving growth in our delivery businesses and in categories beyond office supplies.”
The combined companies will have combined pro forma annual sales of about $39 billion, according to Staples. The deal, which is subject to shareholder and government approval, is expected to close at the end of this year. Sargent will continue at the company’s chairman and CEO.
The office retail stationery landscape has already changed markedly in the past two years, with the acquisition of OfficeMax by Office Depot.
“This transaction delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term,” said Roland Smith, chairman and CEO of Office Depot, in a prepared statement. “It is also an endorsement of our many accomplishments and the tremendous success we’ve had integrating Office Depot and OfficeMax over the past year. We look forward to bringing our experience and knowledge to the new organization.”
Acquisition talks began in September, the companies said. Such a move was urged by activist hedge fund Starboard Value LP, in a letter to Staples last month.
Office Depot shareholders will receive, for each Office Depot share, $7.25 and 0.2188 of a share in Staples stock. Staples will keep its Framingham, Mass., headquarters. Office Depot is based in Boca Raton, Fla.