Two of the biggest players in the retail office supply business are in talks to merge, a move that will forever change the face of the ultra-competitive office supply business.
Officemax and Office Depot are at an advanced stage and an announcement of a merger could come as early as this week, The Wall Street Journal reported. The newspaper cited anonymous sources close to the deal.
The combined company would be competing against Staples, Amazon.com, Costco and Wal-Mart, to name a few major players in the office supply business.
Office Depot has 1,675 stores worldwide, while OfficeMax has about 900 stores. A merger of the two brands would allow the companies to cut costs, including shutting down stores that currently compete against each other. Analysts estimate the companies could get rid of 20 percent of their combined stores and still hold onto customers.
If combined, OfficeMax and Office Depot, with annual sales of $11.5 billion and $7 billion respectively, would still not eclipse the segmentâ€™s largest business, Staples Inc.
Source: Huffington Post