Business

Staples, Office Depot in merger talks: report

Office-supply chains Staples Inc and Office Depot Inc are in advanced talks to merge, the Wall Street Journal reported, citing people familiar with the matter.

Previous bid was nixed, but competition, industry have changed

Staples operates over 300 stores in Canada, but several closed last year amid growing consolidation in the office supplies industry. (Canadian Press)

Office-supply chains Staples Inc and Office Depot Inc are in advanced talks to merge, the Wall Street Journal reported, citing people familiar with the matter.

The price and structure of the proposed deal couldn't be learned and there is no guarantee a deal will be reached, the newspaper reported. 

Staples has a market value of about $11 billion US, while Office Depot has a market value of about $4.1 billion.

Last month, activist investor Starboard Value LP called for the two companies to merge, saying a combined entity would lead to greater savings.

A merger would help fend off intense competition from online retailers such as Amazon.com Inc and big-box chains such as Wal-Mart Stores Inc that sell the same core office supplies, such as paper and ink toner, for less.

The combination of the two would likely get a close look from antitrust regulators, the Journal said.

Office Depot and Staples were not immediately available for comment outside regular U.S. business hours.

Regulators nixed a Staples attempt to buy Office Depot in 1997, citing antitrust concerns.

The FTC approved Office Depot's $976 million acquisition of OfficeMax in 2013 without the need to close stores, citing increased competition in the office supply industry.

In Canada, Office Depot stores existed between 1992 and 2011, when the handful of remaining stores closed.

The company again had a presence in Canada after the subsequent acquisition of Grand & Toy, but in 2014 it was announced that the 19 stores still under that brand would be closed, affecting about 160 employees.

Staples operates over 300 stores in Canada.

With files from CBC News