Staples Blasts U.S. Government For Blocking Office Depot Deal

December 23, 2015, 9:55 PM UTC
Staples store.
Photograph by Spencer Platt — Getty Images

Staples (SPLS) criticized the U.S. government’s opposition to its proposed $5.5 billion acquisition of Office Depot (ODP), calling it “fundamentally flawed” and “misguided.” The office supply chain claimed that the combined company would face stiff competition from (AMZN).

In a filing on Wednesday with the U.S. District Court in Washington, D.C., Staples said the U.S. Federal Trade Commission, which has sued to block the deal, had not proven that the merger of the two largest office supply retailers would reduce competition and make its services more expensive.

“Their businesses face fierce competition today and in the future from a strong and expanding set of competitors,” Staples wrote in the filing, seeking to push the deal through.

FTC spokesman Peter Kaplan declined to comment on Staples’ filing. But the FTC, in opposing the deal, said earlier this month that the combination would create an overly dominant player, with some 70% of the corporate services market.

Nonsense, Staples replied.

Staples “competes vigorously” with the likes of Amazon and Amazon Business, along with W.B. Mason and other companies that sell office supplies, janitorial items, and break room supplies. What’s more, Staples said the FTC itself admitted in 2013 that Staples and Office Depot faced “strong competition” when it let Office Depot buy OfficeMax.

The FTC is trying to win a preliminary order from a federal judge to prevent the merger so that the agency can proceed with an administrative trial in May. Office Depot has said the proposed deal won’t withstand a lengthy trial. The court is set to hear FTC arguments for the injunction starting March 21.