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Dec 7 (Reuters) - The U.S. Federal Trade Commission said it
has filed a complaint aimed at stopping Staples Inc SPLS.O ,
the nation's largest office supply store, from buying its top
rival, Office Depot Inc ODP.O .
Canada's Competition Bureau also said on Monday it would
challenge the proposed transaction, which has received the green
light from competition authorities in China, Australia and New
Zealand.
Office Depot's shares fell as much as 17.6 percent to a year
low of $5.46, while Staples' stock dropped 13.6 percent to a
year low of $10.68.
"The commission has reason to believe that the proposed
merger between Staples and Office Depot is likely to eliminate
beneficial competition that large companies rely on to reduce
the costs of office supplies," FTC Chairwoman Edith Ramirez said
in a statement. (http://1.usa.gov/1NeaaD9)
The FTC said Staples and Office Depot were often the top two
bidders for large business customers and the deal would hurt
customers who wanted nationwide contracts for office supplies.
The companies said in a statement on Monday that they would
fight the FTC in court, arguing that they face stiff competition
from manufacturers who sell their own products, e-commerce
companies, big box stores and others.
The deal is also being investigated by EU regulators, who in
September raised concerns about possible price hikes.
The FTC stopped a merger attempt between the same two
companies in 1997 on similar concerns.
But in the past 19 years, Amazon AMZN.O and other online
sellers, which deliver to almost anywhere in the United States,
have exploded onto the scene, while megastores such as Costco
COST.O and Wal-Mart Stores Inc (N:WMT) WMT.N have further crowded
the market.
Staples was emboldened to make a $6.3 billion offer for
Office Depot in February after that chain succeeded in buying
No. 3 OfficeMax in November 2013 with no divestitures.
This time around, Staples has offered divestitures totaling
"more than $500 million in commercial business" in order to
allay the FTC's concerns.
This has been a year of aggressive deals killed by equally
aggressive U.S. antitrust authorities.
Other deals contested by regulators include General Electric (N:GE)
Co's GE.N $3.3 billion agreement to sell its appliances
business to Sweden's Electrolux, Comcast's CMCSA.O bid to buy
Time Warner Cable (N:TWC) TWC.N , and Sysco (N:SYY)'s SYY.N plan to buy US
Foods.
Other mergers under review include two insurance deals:
Aetna (N:AET)'s AET.N deal for Humana (N:HUM) HUM.N and Anthem's ANTM.N
planned merger with Cigna (N:CI) CI.N .
Halliburton (N:HAL)'s HAL.N offer to buy its rival oilfield
services provider Baker Hughes (N:BHI) BHI.N is also under review.