Last Friday, Staples Inc. (NASDAQ: SPLS) and Office Depot Inc. (NYSE: ODP) announced that the two companies “certified substantial compliance” with the second request from the Federal Trade Commission (FTC) for information relating to the proposed merger of the two office supply giants. The companies also agreed to wait 45 days to close the deal, adding 15 days to the statutory 30-day timeframe.

There are doubts that the deal will get FTC approval, however, based on a market-share argument that the proposed combination imperils competition.

When Office Depot merged with Office Max, the commission approved the deal because it said that the entry of competitors like Amazon and Wal-Mart had eliminated the pricing power of the office supply superstores. The decision really changed the ground rules by acknowledging that local competitors, non-superstore competitors like Wal-Mart and online retailers like Amazon had created a market for office supplies that was national rather than driven by the superstores.

A report from the New York Post today notes that the FTC has sent out another round of subpoenas that sources told the newspaper “means they [the FTC] are trying to build a case they are prepared to file suit,” presumably to block the merger, likely on antitrust grounds.

Share prices for both companies have slipped since the merger was first proposed in February. Office Depot’s shares jumped about 75% on the announcement of the merger but have dropped nearly half that gain since early August. Staples’ shares are down almost 20%. Investors are clearly worried.

Staples stock closed down 2.3% on Thursday, at $13.80 in a 52-week range of $11.39 to $19.40.

Office Depot shares closed down more than 4%, at $7.32 in a 52-week range of $4.26 to $9.77. Staples offered to pay $11 per share in cash and stock for Office Depot in a deal valued at $6.3 billion.

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