U.S. District Court for the District of Columbia sided with the Federal Trade Commission as it pressed to block the merger of Staples Inc. (NASDAQ: SPLS) and Office Depot Inc. (NASDAQ: ODP). The argument was that the deal would harm competition. The two companies have killed the transaction.
“We are extremely disappointed that the FTC’s request for preliminary injunction was granted despite the fact that it failed to define the relevant market correctly, and fell woefully short of proving its case,” said Ron Sargent, Staples’ chairman and chief executive officer. “We believe that it is in the best interest of our shareholders, customers, and associates to forego appealing this decision, terminate the merger agreement, and move on with our strategic plan to drive shareholder value. We are positioning Staples for the future by reshaping our business, while increasing our focus on mid-market customers in North America and categories beyond office supplies.”
As an aside, Staples will pay Office Depot a $250 million break up fee.
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Staples also plans to terminate its agreement to sell more than $550 million in large corporate contract business and related assets to Essendant in connection with the termination of the Office Depot merger agreement.
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