Corporate Law Blog

Shareholders approve Office Depot acquisition, but will FTC?

Whenever a merger of major corporations is proposed, a lot has to happen before the vision becomes reality. Not only must the businesses engage in talks both internally and with one another about the possibility of a merger or acquisition, shareholders need to be convinced to get on board, as well as the Federal Trade Commission and, to an extent, the public. All of these factors can impact the success of a merger or acquisition.

In an attempt to adjust to shifting market circumstances, office supply stores Office Depot and Staples are currently working through the merger process, having announced back in February that an agreement had been reached. The motivation behind the merger is based on changes in technology use in the workplace, as well as the steady increase in online sales. Staying competitive in the current market will be more viable for both companies if they work together, which is a fairly common theme in the field of mergers and acquisitions.

The most recent development in the merger is that Office Depot shareholders have voted to go forward with the company's acquisition of Staples, the proposal having passed by an overwhelming majority of 99.5 percent. Still in the works is the Federal Trade Commission's review of the agreement, which will be interesting given the fact that the commission denied approval of a merger between the two companies a number of years ago. Market circumstances have certainly changed since then, but given that Office Depot acquired OfficeMax last year, it isn't clear whether further consolidation of competition will win approval from federal authorities.

In our next post, we'll take a brief look at some of the things the Federal Trade Commission looks at when considering mergers.