Office Depot (NYSE: ODP) and OfficeMax Inc. have completed their $1.2 billion merger, just days after securing the Federal Trade Commission's approval for the blending of the nation's second- and third-largest office supply retailers.
Office Depot closed the deal to buy out the smaller Office Max late Tuesday, Nov. 5, and the combined company will begin trading today, Nov. 6, under the symbol ODP on the New York Stock Exchange.
Each company will maintain its respective name and e-commerce site for now. The two firms' chief executives will temporarily serve as co-CEOs of the combined company until a permanent replacement is named. Executives were unsure about the timing of the FTC approval, making the appointment of a new CEO a challenge by the time the deal closed, according to the committee in charge of the search.
The merger is expected to cut costs, consolidate assets, and improve business with suppliers who often look to do business with Staples, the current frontrunner in the office-supply market. Together, Office Depot and Office Max had sales of $17 billion in the year that ended in September and about 2,100 stores. Staples still remains as the largest office supply retailer with $24 billion in annual revenue with only 1,424 stores. By the end of the third year following the close of the merger, Office Depot expects cost savings in the $400 million to $600 million range.
The deal was announced in February and shortly thereafter the FTC began a seven-month investigation into the merger, based on the fact that online office supplies retailers will allow for competition in the office supplies market.
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