Dive Brief:
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Staples Inc. and Office Depot Inc. could potentially go ahead with their merger if another corporate office-supplies business would acquire some of Staples’ business.
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Essendant, formerly United Stationers, which has been consolidating and expanding its own wholesale business, said during an earnings call last week that it would be open to acquisitions, although the company didn’t comment on the specific idea of acquiring any of Staples' business.
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Without this type of side deal, the proposed acquisition of Office Depot by Staples is likely questionable, according to a report from Bank of America.
Dive Insight:
While a shift in the retail office supplies business has led many to think that consolidation in stores would past muster by the Federal Trade Commission, concerns about further consolidation in the contract-based business supplies space could scuttle the proposed Staples-Office Depot merger.
By the same token, breaking off some of that business to sell to another player could save the merger, according to this report by Bank of America analysts.
"The FTC is clearly continuing to evaluate the situation, with apparent efforts being made to vet a solution involving a capable industry participant," according to the report.