Staples and Office Depot have announced their intention to extend their potential merger agreement as it disputes the FTC. Each company’s board of directors have waived the set merger agreement termination date of February 4 for the combination of the two retailers. The boards have extended the termination date to May 16.
The extension allows for ongoing litigation with the United States Federal Trade Commission to continue.
In addition, Staples and Office Depot stated that they are working to extend financing terms for the transaction. The company’s stated that they expect to execute the merger extension agreement once they get financing terms finalized.
“This merger creates an unparalleled opportunity to better serve our customers and to deliver shareholder value,” said Ron Sargent, Staples CEO. “We are committed to completing this transaction and look forward to a full and impartial judicial review.”
On February 4, 2015, Staples and Office Depot entered into a definitive merger agreement to combine their operations as a single company, based on the premise that the combined company would be in a better position to provide customer value and compete against a large and diverse set of rivals.
In late December, Staples reported that the FTC rejected the company’s latest divestiture offer to acquire Office Depot without making a counteroffer.
Earlier that month, the FTC announced that it would contest the merger. The FTC indicated that Staple’s proposed $6.3 billion acquisition of Office Depot would violate antitrust laws by significantly reducing competition nationwide for consumable office supplies sold to large business customers. In response, the retailers said that they would fight the FTC challenge to their proposed merger.