Ama­zon weighs in on pro­posed Sta­ples-Of­fice De­pot merger

The Pak Banker - - COMPANIES/BOSS -

An ex­ec­u­tive with Ama­zon.com Inc's (AMZN.O) unit that sells of­fice sup­plies to busi­nesses gave tes­ti­mony on Tues­day that ap­peared to bol­ster a U.S. reg­u­la­tor's wari­ness over a po­ten­tial merger of Sta­ples Inc (SPLS.O) and Of­fice De­pot Inc (ODP.O). The U.S. Fed­eral Trade Com­mis­sion filed a law­suit last year to block the pro­posed $6.3 bil­lion ac­qui­si­tion of Of­fice De­pot by Sta­ples, ar­gu­ing that it would hurt com­pe­ti­tion and lead to higher prices for con­sumers.

A fed­eral judge is con­sid­er­ing whether to is­sue a pre­lim­i­nary in­junc­tion to block the deal. The de­ci­sion will de­pend in part on whether Ama­zon is per­ceived as a po­ten­tial big player in the of­fice sup­ply busi­ness. The Ama­zon ex­ec­u­tive will be cross-ex­am­ined by lawyers for Sta­ples on Wed­nes­day.

Dur­ing the se­cond day of a hear­ing on Tues­day, Pren­tis Wil­son, vice pres­i­dent of the rel­a­tively new Ama­zon Busi­ness unit, tes­ti­fied that his busi­ness had no big cor­po­rate cus­tomers, did not stock shelves and of­ten did not bid for a cus­tomer's busi­ness. Wil­son's com­ments ap­peared to sup­port the FTC's ar­gu­ment that the on­line re­tailer could not pro­vide the same level of ser­vices as Sta­ples and Of­fice De­pot.

Wil­son tes­ti­fied that Ama­zon Busi­ness, which be­gan in early 2015 as a suc­ces­sor to Ama­zon Sup­ply, is start­ing to re­spond to some de­mands by cor­po­rate cus­tomers. It al­lows com­pa­nies to ap­prove pur­chases by their em­ploy­ees. It has also started per­mit­ting com­pa­nies to pay an in­voice in­stead of pay­ing for pur­chases up front.

But Wil­son said that Ama­zon Busi­ness re­sponded to re­quests for pro­pos­als, which are es­sen­tially bids, only in a "lim­ited way." He said the unit does not cre­ate cus­tom­ized cat­a­logs for com­pa­nies and does not stock shelves for com­pa­nies.

"At this point, Ama­zon Busi­ness does not ne­go­ti­ate con­tracts with large busi­ness cus­tomers," he said.

Asked if Ama­zon was the pri­mary sup­plier to any com­pany with rev­enue over $250 mil­lion, Wil­son said, "Not to my knowl­edge, no."

In open­ing ar­gu­ments on Mon­day, Sta­ples' lawyer, Diane Sul­li­van, ar­gued that her client feared Ama­zon, which said in 2015 that it planned to en­ter the of­fice sup­plies mar­ket in a se­ri­ous way. -

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