CEOs to testify in FTC case

Staples, Office Depot want deal

Office Depot CEO Roland Smith and Staples CEO Ron Sargent are scheduled to testify this week in Washington, D.C., in the Federal Trade Commission’s court challenge to Staples’ $6.3 billion acquisition of Office Depot.

Court documents show Smith and Sargent as the last two witnesses on the list this week in U.S. District Court before Judge Emmet G. Sullivan. Also testifying will be Shira Goodman, president of North American Operations for Staples.

Staples and Office Depot, which employs about 2,000 at its headquarters in Boca Raton, are battling to complete the acquisition that Office Depot shareholders approved last May. The FTC voted in December to oppose the merger, saying it would harm competition and drive up prices for bulk purchasers of office supplies.

Staples and Office Depot contend their merger will save money as they face growing competition from Amazon and discount retailers. In an effort analysts say is meant to address the FTC’s concerns, the companies have offered to transfer $550 million in large company contracts to Illinois wholesaler Essendant.

The FTC has said the transfer doesn’t go far enough to allow Essendant to compete with Staples and Office Depot, which together would control the bulk office-supply market.

Stock in both companies has jumped since the court case began March 21, an indication that investors are optimistic the merger will go through. Staples closed Tuesday at $11.10, up 11 percent in that time. Office Depot closed at$7.59, up32 percent.

Both stocks surged Thursday after U.S. District Judge Emmet Sullivan criticized the FTC for trying to elicit false information from

an Amazon.com executive to bolster its case.

On Tuesday, the New York Post, quoting anonymous sources, reported that the two companies could be on the brink of winning their case. The Post said the judge would entertain amotion from Staples’ legal team to dismiss the case once the FTC concludes its arguments thisweek.

If the merger is completed, Smithwould receive compensation totaling $46.78 million. He was named CEO of Office Depot in November 2013. In total, Office Depot’s top executives would receive $85 million.

Sargent would continue as CEO of the combined operation, which he has said would be headquartered out of Framingham, Mass. Thatwould mean a loss of a top headquarters company in Palm Beach County and could result in major lay offs.

Staples expects a decision