Office Depot owner ODP Corp to split into two companies

(Reuters) -Office Depot owner ODP Corp said on Wednesday it would spin off its distribution platform, which schools, offices and other businesses use to buy supplies, into a separate company.

ODP, which rejected rival office supplies retailer Staples’ offer to buy some of its assets earlier this year, said the separated company would include ODP’s business solutions division and Canadian office supplies retailer Grand & Toy.

The new company will also own ODP’s regional office supply distribution businesses, it said.

The spin-off is expected to occur through the distribution of shares of the new company as tax-free dividend to ODP’s shareholders and is projected to be completed in the first half of next year, the company said.

Shares of ODP, which also reported a 13% drop in first-quarter sales, rose 5% to $44.60 in premarket trading.

Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli and Amy Caren Daniel