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Daily Digit: $2 bln office romance

Tuesday, February 19, 2013 - 01:19

Feb. 19 - Office Depot and OfficeMax's combined market value is $2 billion and a deal to merge the two office supply retailers could come this week. Conway G. Gittens reports.

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The Daily Digit is two, as in two billion dollars. That's the combined market cap of two office supply retailers, Office Depot and OfficeMax. The firms are in advanced talks to merge, and a deal could come as early as this week, according to a Reuters source. These two need to combine, says Reuters BreakingViews columnist Christopher Swann. SOUNDBITE: CHRISTOPHER SWANN, COLUMNIST, REUTERS BREAKINGVIEWS (ENGLISH) SAYING: "It is a marriage made in heaven to the extent that they're both businesses that are really struggling to survive. They're under really heavy fire from the internet. Both of them have astonishingly thin margins. They barely make a living. And they have tremendous overlaps. They have a lot of stores that are tremendously close by. And if you look at the potential synergy savings, we could be talking about up to 3 billion, which is actually worth more than the combined value of two companies." Both companies trail industry leader Staples. As a matter of fact Staples tried to buy Office Depot back in 1997, but the Federal Trade Commission blocked that $4 billion merger, saying it would lead to less competition and higher prices for customers. But times have changed since then and now analysts play down those concerns as retailers such as Target and online chain Amazon.com become bigger players in office supplies.

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Daily Digit: $2 bln office romance

Tuesday, February 19, 2013 - 01:19