Office supplies retailers OfficeMax (NYSE: OMX) and Office Depot (NASDAQ:ODP) announced today that the Federal Trade Commission signed off on their proposed $976 million all-stock merger that was announced more than eight months ago. With the last hurdle cleared, the two companies anticipate the deal will be completed on Tuesday.
The union will create an office supplies giant with combined revenues of approximately $17 billion as of June 29 that will be better able to challenge the dominance of rival Staples, which had trailing revenues of $24 billion as of the end of August.
Believing the merger will benefit the customers and shareholders of both companies, Office Depot Chairman and CEO Neil Austrian said in a statement, "This merger represents a new beginning for Office Depot and OfficeMax -- one that will enable us to create a stronger, more efficient global provider better able to compete in the dynamic and rapidly changing office solutions industry."
That was echoed by OfficeMax President and CEO Ravi Saligram, who called the merger a "transformative" one for the business, saying, "OfficeMax and Office Depot share a similar vision for the future, and will greatly benefit from drawing on the industry's most talented people and combining our best practices. Our goal remains to ensure a smooth transition for all of our stakeholders and to begin capturing cost synergies as soon as possible after closing."
Amongst those synergies are expected to be significantly improved financial strength and flexibility, the ability to deliver long-term operating performance and improvements, and increased competitiveness.
Both companies are scheduled to release their third-quarter earnings reports after the markets close on Monday, and additional details about the transaction and the combined company's operations are expected to be released in conjunction with the closing.