3rd Staples bid for Office Depot

Staples just made its latest takeover bid for Office Depot — and it’s hoping the third time’s a charm.

The owner of office-supplies giant Staples said Monday it has offered $2.1 billion, $40 a share, for its rival and could go hostile in March by making a tender offer if Office Depot refuses to engage in talks.

Office Depot shares on Monday surged 19 percent to $44.14 on the surprise buyout offer. The retailer said in a statement its board of directors was reviewing the offer and will consider potential regulatory stumbling blocks to the deal, including antitrust challenges.

Regulators twice before have successfully stopped Staples from acquiring Office Depot, each time for different reasons. In 1997, the Federal Trade Commission blocked a proposed merger on fears that the combined chains would hold a monopoly over the US office-supplies market.

In 2016, the FTC blocked a second proposed deal, that time on fears that the two retailers would combine their business units that cater directly to companies, raising prices for corporate customers.

At the time, the FTC had argued that Staples and Office Depot would control 70 percent of the business-to-business market, with the next largest competitor only less than five percent.

On Monday, however, Staples signaled that it is willing to sell Office Depot’s commercial-business unit to satisfy regulatory concerns. Meanwhile, it’s expected to argue that its combined retail chains no longer pose a monopoly threat given Amazon’s expansion into the niche.

Amazon likely has gained ground on Staples and Office Depot in the business-tobusiness market, since more people are working from home. But that should have little impact on this merger review, according to a DC antitrust attorney who spoke on the condition of anonymity.

The attorney said the FTC is reviewing mergers now by looking at their market shares pre-pandemic, and not what has happened in the last nine months