Staples, Office Depot to sell corporate assets to supplier

Staples and Office Depot announced an agreementTuesday to sell more than $550 million in large corporate contract business and related assets to office-supply wholesaler Essendant.

Deerfield, Ill.-based Essendant will pay Staples about $22.5 million, the companies said. More than 25 percent of the revenue acquired by Essendant will be from Fortune 100 companies and approximately half of the revenue will come fromFortune 500 companies, Staples noted.

The sale is subject to successful completion of the proposed $6.3 billion merger of Staples and Office Depot, which employs about 2,000people at its headquarters in Boca Raton. If completed, Palm Beach County is likely to lose Office Depot’s headquarters and many jobs would be affected. Staples has said the combined companies’ home would be in Framingham, Mass.

Whether the sale affects the Federal Trade Commission’s opposition to the proposed merger between the office supply giants remains to be seen.

Reached late Tuesday afternoon, FTC spokeswoman Elizabeth Lordan said Tuesday it has nocommenton the Staples’ agreement with Essendant.

Asked his view on whether the proposed divesture could change the FTC’s position that a merger would stifle competition for bulk buyers of office supplies, Kantar Retail analyst David Marcotte said, “I don’t knowif it’s enough to make the FTC blink.”

A trial over the FTC’s challenge is set to begin May 10 in U.S. District Court in Washington, D.C. unless the FTC drops its objection to the merger.

Marcotte said he also doesn’t believe that the EuropeanUnion’s approval last week of the merger, accompanied by the companies’ agreement to sell Office Depot’s European operations, will be an influence on federal regulators.

Theproposed sale to Essendant appears to be nearly the same deal floated by Staples in November to appease federal regulators. The amount then was $600 million, according to anonymous sources reported in TheWall Street Journal.

Staples’ proposed merger with Office Depot was inked a year ago February and approved by shareholders inMay. The FTC rejected the merger and filed its challenge in December.

The merger also has been challenged by the American Antitrust Institute and the American Postal WorkersUnion.

Staples CEO Ron Sargent said the agreement with Essendant “strengthens a national competitor, further enables office products dealers, and helps minority and women-owned businesses compete for national commercial customers.”