European regulators Wednesday gave the proposed $6.3 billion merger of Staples Inc. and rival Office Depot a conditional green light.
In order to garner the approval, Staples has agreed to sell Office Depot’s contract business in Europe as well as Office Depot’s entire Swedish business. The European Commission's investigation focused on the effects of the merger on the international business-contract sales space and in business-contract sales in the Netherlands and Sweden, according to a European Commission press release.
The merger has garnered approval in Australia, New Zealand, China, and now Europe, but faces tough scrutiny in the U.S. and Canada.
Staples has moved closer to success in its acquisition of smaller rival Office Depot, but is facing tough hurdles in the U.S. and Canada.
In December the Federal Trade Commission filed a federal complaint in court to block the proposed merger between the two retailers over antitrust concerns in the corporate contracts business.
This business supplies side, rather than the retail sales side, has emerged to trip up the deal. Antitrust watchdog advocates raised the issue over the summer, urging the FTC to take a close look, and, though resolved, European regulators clearly had similar concerns.
“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 December statement. “The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customers.”
Staples at that time vowed to fight the FTC’s block, and has also said it’s willing to divest operations to appease regulators’ concerns, as it now has in Europe.
But Boston College law professor Brian Quinn, a mergers and acquisitions expert, told the Boston Globe that they’ll more likely end up dropping the matter and move on.
“It could take years to litigate this,” Quinn told the Globe in December. “They have too many other things they can do with their money.”