Office Depot and OfficeMax Announce Plans to Merge

“In the past decade, with the growth of the Internet, our industry has changed dramatically,” Neil R. Austrian, chairman and chief executive of Office Depot, said in a statement. “Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors and increase stockholder value.”tyre equipments
While the deal has been years in the making, it was initially announced prematurely. A news release announcing the merger of the companies was posted on Office Depot’s Web site early on Wednesday morning, but it quickly disappeared.tyres and wheels service & repair equipment
Several news organizations reported the terms disclosed in the errant news release for Office Depot’s earnings. The details were buried on page four of the release, under the header “Other Matters.”
A branch of Office Max in Bothell, Wash.Kevin P. Casey for The New York TimesA branch of Office Max in Bothell, Wash.garage equipments
As the details filtered through the market, shares of the companies jumped. In premarket trading, Office Depot’s stock rose more than 7 percent, while OfficeMax shares were up more than 8 percent.
In a call with analysts, Mr. Austrian said that Office Depot’s webcast provider “inadvertently” published his company’s fourth-quarter earnings “well ahead of schedule.”
The episode is reminiscent of other times that companies’ earnings releases were published prematurely. Last fall, Google‘s third-quarter earnings were published three hours early, which the technology giant blamed on a mistake by R.R. Donnelley & Sons, the company’s printer.China 4x4 Accessories wholesalers
Representatives for Office Depot and OfficeMax were not immediately available for comment on the erroneous release.
Strategically, the deal makes sense, as the companies face a changing competitive environment.
Combined, the companies reported about $4.4 billion in revenue for their third quarter of 2012; in comparison, Staples disclosed $6.4 billion in revenue for the same period.
Office Depot has also been under pressure from an activist hedge fund, Starboard Value, which sent a letter to the retailer’s board last fall. In it, Starboard called for more cost cuts and a greater focus on higher-margin businesses like copy and print services. With a 14.8 percent stake, Starboard is the company’s biggest investor.
In announcing the deal, the two companies emphasized their new financial heft.
With the merger, the retailers expect to generate $400 million to $600 million in annual cost savings. The combined entity would also have $1 billion in cash, providing additional firepower to invest in the business.
“We are excited to bring together two companies intent on accelerating innovation for our customers and better differentiating us for success in a dynamic and highly competitive global industry,” Ravi K. Saligram, chief executive of OfficeMax, said in a statement. “We are confident that there will be exciting new opportunities for employees as part of a truly global business.”
Each company will have an equal number of directors on the board of the combined retailer. Before the deal closes, OfficeMax will pay a special dividend of $1.50 a share to its shareholders.Auto Accessories wholesalers
OfficeMax was advised by JPMorgan Chase and the law firms Skadden, Arps, Slate, Meagher & Flom and Dechert. Office Depot was counseled by Simpson Thacher & Bartlett, while its board was advised by the Peter J. Solomon Company, Morgan Stanley and Kirkland & Ellis. Perella Weinberg Partners provided financial advice to the board’s transaction committee.