The owner of Staples is proposing to take over Office Depot in a deal worth more than $2 billion, looking to unite the rival office-supply superstores whose previous marriage attempts have been thwarted by competition concerns.
It marks the third time that Staples has tried to acquire its main bricks-and-mortar rival. Previous efforts, including a deal worth $6.3 billion five years ago, were blocked by antitrust enforcers. Both companies have embraced e-commerce and curbside services as the pandemic has fueled a shift to working and learning from home.
After the last failed deal, Staples was taken private by Sycamore Partners, a hedge fund that has scooped up battered retail chains, in a leveraged buyout in 2017. The company, now controlled by a Sycamore subsidiary called USR Parent Inc., said Monday it is proposing to buy ODP Corp. for $40 a share in cash.
ODP shares climbed more than 16% on Monday to $42.95 after closing trading last week at $36.96. In addition to Office Depot , ODP also owns the OfficeMax chain and CompuCom, a technology-services provider. It had $10.6 billion in revenue in 2019.
Staples and Office Depot abandoned plans for a merger in 2016 after the Federal Trade Commission sued to block the deal, saying it would hurt competition and raise prices for large businesses that buy office supplies in bulk. A federal judge sided with the commission and rejected the companies’ argument that Amazon.com Inc.’s then-nascent bulk office-supplies unit represented a major competitive threat.
