WSJ: FTC Set To Approve Office Depot, Office Max Merger Without Divestitures

(RTTNews) - The Federal Trade Commission or FTC, is all set to give regulatory approval for the proposed merger of office products retailer Office Depot, Inc. (ODP) with its peer OfficeMax, Inc. (OMX) that was agreed up op in February. The approval is expected over the next two to three weeks, though a final decision on the approval is yet to be reached.

The FTC has reportedly concluded after a lengthy antitrust review of more than seven months that the deal is not likely to substantially lessen competition. The deal is expected to be approved with the companies not being required to make any divestitures.

The delay in regulatory approval for the merger is also extended due to the two week long federal shutdown.

The merger of the second and third largest office-supply superstores in the U.S. will create a combined entity with annual revenues of $18 billion that will still not top market leader Staples, Inc.'s (SPLS) revenues of $25 billion. The deal was originally expected to close by the end of 2013.

Boca Raton, Florida-based Office Depot agreed on February 20 to acquire Naperville, Illinois-based OfficeMax in an all-stock merger deal valued at about $1.2 billion to create a global office solutions company in order to fight competition from market leader Staples, Inc. (SPLS), Amazon.com, Inc. (AMZN) and other discount retailers such as Costco Wholesale Corp. (COST), retail giant Wal-Mart Stores, Inc. (WMT), Sam's Club and Target Corp. (TGT).

FTC had way back in 1997 blocked a proposed merger of Office Depot and Staples, saying that the deal would lessen retail competition in several markets and will lead to higher prices for customers.

ODP closed Friday's regular trading session at $5.46, up $0.07 or 1.30% on a volume of 6.71 million shares, and OMX closed at $14.65, up $0.21 or 1.45% on a volume of 1.29 million shares.