Regulator seeks merger injunction
The Commerce Commission has applied for an injunction from the High Court in Auckland to block the merger of office products firms Staples and OfficeMax, despite having previously granted clearance for the merger in 2015.
The watchdog said the takeover of OfficeMax by United States private equity company Platinum Equity – which now owns Staples – would be likely to have the effect of substantially lessening competition in the supply of stationery to large corporate and government customers.
The competition watchdog had previously cleared the merger after receiving advice from the Ministry of Business, Innovation and Employment (MBIE) that it had no objection to the deal.
The commission said clearance had lapsed as the merger did not take place in a ‘‘statutory 12-month timeframe’’.
MBIE – which is responsible for negotiating ‘‘all of government’’ contracts between about 450 government agencies and office supplies firms – had cited the competition the merged firm would face from Fuji Xerox and fellow office products companies Corporate Consumables and OPD.
But the Commerce Commission’s ability to rely on that advice appears to have been undermined after Fuji Xerox New Zealand became embroiled in a huge accounting scandal.
The scandal has led to Fuji Xerox restating its accounts as far back as 2011 and being removed from a panel of companies that are entitled to bid for deals to supply stationery products to public sector organisations, including schools.
It has also been suspended from a much more lucrative arrangement under which it had been able to supply printers and copiers to public sector agencies.
The Serious Fraud Office said last month that it had opened a new investigation into the issues at Fuji Xerox NZ, after previously closing an inquiry earlier this year.
Australian company Complete Office Suppliers had already applied for an injunction to stop the Staples-OfficeMax merger, which had been due to be heard next week.
The commission said in a statement that both injunction applications were now likely to be heard in court at the same time, later this year.