Approval of Office Max and office Depot Mergers by Federal Trade Commission (Research Paper Sample)

Acquisition and Mergers:
Name:
Instructor’s Name:
University:
Date:
Approval of Office Max and office Depot Mergers by Federal Trade Commission
Approval of mergers is a procedural exercise that requires the attention of the companies involved and the stakeholders. The office Supply Retail Industry has gone through challenges in the past rendering them unfit for approval by the Federal Trade Commission. A successful merger is achieved if, companies and stakeholders engage in discussions regarding acquisition decisions. Office Supply stores have fought hard for relevance even though supply and demand continue to go high in the industry (Reuters, 2013).
According to Reuters, (2013), in 2013, the U.S Federal Trade Commission approved Office depot and Office Max suppliers. This comes after a drop of about 7% for Office Max and 3.8% by office depot. The results from the Office Supply retail industry indicated that office depot and the Office Max had experienced decline in store sales for six years. The decline experienced in 2012, was a basis for the Federal Trade Commission to deny the two companies approval for the merger in previous years. It took the intervention of the stakeholders who voted the proposal 99.5% fit (, 2015).
The argument by stakeholders was based on believe that technology shall boost the success of the consolidation. Reuters, (2013) says the merger between Office Max and Office Depot is anticipated to raise about $1.2 billion. OfficeMax stakeholders anticipated that the company will earn them 2.69 shares worth from Office Depot stock. Competition is however stiff given that Wal-Mart and Amazon offer the same products at reduced prices. Market concentration means that a few companies will dominate the market. This means that companies that dominate the market will reap high profits at the expense of the consumers. Will variety of companies to choose from, consumers enjoy reduces prices for the same product (Ong, 2013).
The Office depot CEOs from both companies agree that the merger will increase sales and improve economic growth. For instance, the newly consolidated companies will lead to reduced costs and increased sales of stores that are dormant (, 2015). According to Reuters, (2013), office depot has stores in the US and Canada amounting to 1,675 while OfficeMax has stores in the US and Mexico amounting 900. The society shall benefit from this consolidation especially through introduction of combined online sales. The anticipated digital platforms shall increase capabilities to effectively serve customers and to achieve competitive advantage (Ong, 2013).
The merger came at a time when the use of technology at workplaces is profoundly admired. The companies hoped to increase online sales as it fought for competitive advantage in the market. The companies mutually agreed to stick together in a bid to increase the chances of success. Office depot’s shareholders voted for the merger and acquisition of staples. The voting was successful hence acquisition of staples was done (Ong, 2013).
According to analysts, the merger between Office Max and Office depot would not last given than both companies experienced a sharp...