Staples, FTC stalled on settlement talks
By Diane Bartz
WASHINGTON (Reuters) - The U.S. Federal Trade Commission is looking for office supply store Staples (SPLS.O: Quote) to improve its offer to divest assets to further its bid to buy rival Office Depot (ODP.O: Quote), the agency said in court on Thursday.
Arguing for Staples, Diane Sullivan said that the company had made a "significant and substantial" offer to the FTC. The company said earlier this month that it had offered to divest $500 million in commercial contracts.
Arguing for the FTC, Tara Reinhart said at a pre-trial hearing that the FTC had rejected that as inadequate. "We have actually asked them to come back," she said.
The FTC filed a complaint on December 7 aimed at stopping Staples from buying Office Depot, saying that the deal would hurt big customers who want nationwide contracts to buy their office supplies. The $6.3 billion deal had been announced in February.
Canada's Competition Bureau has also said that it would challenge the proposed transaction.
The FTC is asking the court for a preliminary injunction so that it can try the case in an internal process. The trial on the preliminary injunction is expected in March with a decision in May, said Judge Emmet Sullivan.
The agency stopped a merger attempt between the same two companies in 1997 but in the 19 years since then, Amazon (AMZN.O: Quote) and other online sellers, which deliver across the United States, have emerged as competitors, while chain stores such as Costco (COST.O: Quote) and Wal-Mart Stores Inc (WMT.N: Quote) have further crowded the market.
Staples was emboldened to try again for Office Depot after that chain succeeded in buying No. 3 OfficeMax in November 2013 with no divestitures. Continued...