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Dec 7 (Reuters) - The U.S. Federal Trade Commission said it has filed a complaint aimed at stopping Staples Inc, the nation’s largest office supply store, from buying its top rival, Office Depot Inc.
Canada’s Competition Bureau also said on Monday it would challenge the proposed transaction, which has received the green light from competition authorities in China, Australia and New Zealand.
Office Depot’s shares fell as much as 17.6 percent to a year low of $5.46, while Staples’ stock dropped 13.6 percent to a year low of $10.68.
"The commission has reason to believe that the proposed merger between Staples and Office Depot is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies," FTC Chairwoman Edith Ramirez said in a statement. (1.usa.gov/1NeaaD9)
The FTC said Staples and Office Depot were often the top two bidders for large business customers and the deal would hurt customers who wanted nationwide contracts for office supplies.
The companies said in a statement on Monday that they would fight the FTC in court, arguing that they face stiff competition from manufacturers who sell their own products, e-commerce companies, big box stores and others.
The deal is also being investigated by EU regulators, who in September raised concerns about possible price hikes.
The FTC stopped a merger attempt between the same two companies in 1997 on similar concerns.
But in the past 19 years, Amazon and other online sellers, which deliver to almost anywhere in the United States, have exploded onto the scene, while megastores such as Costco and Wal-Mart Stores Inc have further crowded the market.
Staples was emboldened to make a $6.3 billion offer for Office Depot in February after that chain succeeded in buying No. 3 OfficeMax in November 2013 with no divestitures.
This time around, Staples has offered divestitures totaling “more than $500 million in commercial business” in order to allay the FTC’s concerns.
This has been a year of aggressive deals killed by equally aggressive U.S. antitrust authorities.
Other deals contested by regulators include General Electric Co’s $3.3 billion agreement to sell its appliances business to Sweden’s Electrolux, Comcast’s bid to buy Time Warner Cable, and Sysco’s plan to buy US Foods.
Other mergers under review include two insurance deals: Aetna’s deal for Humana and Anthem’s planned merger with Cigna.
Halliburton’s offer to buy its rival oilfield services provider Baker Hughes is also under review. (Reporting by Diane Bartz in Washington and Ramkumar Iyer in Bengaluru; Editing by Alan Crosby and Savio D‘Souza)