On may 19, 2016, staples and office depot abandoned their proposed merger after the district court granted the commission's request for a preliminary injunction ftc dismissed the case from administrative trial process. The merger between staples and home depot is over — and not in the ways either party were hoping for when the possibility of the two office supply chains merging first hit the headlines a year ago. A federal judge has blocked the proposed merger of staples and office depot, saying the government had made the case that the merger had a reasonable probability of hurting competition in office.
A federal judge on tuesday blocked staples' $63 billion acquisition of office depot, siding with regulators who argued the merger of office supply titans would reduce competition and raise prices. Staples was emboldened to offer to buy office depot, based in boca raton, florida, after the smaller chain succeeded in buying no 3 officemax in november 2013 with no divestitures. The news that a federal judge has blocked a proposed merger between office depot and staples sent wall street scrambling, with shares in the two firms plummeting in early trading wednesday. The deal would eliminate head-to-head competition between staples and office depot and likely lead to higher prices and lower quality of service for large businesses that buy office supplies.
Proposed merger between staples and office depot leads to concerns of higher prices 1 in september, 1996, staples agreed to acquire the assets of office depot at the time, staples, office depot, and office max were the three largest office supply retailers in the united states. Depot, inc (office depot) have executed a merger agreement in violation of section 5 of the ftc act, 15 usc § 45, which if consummated would violate section 7 of the clayton act, as amended, 15 usc § 18, and section 5 of the ftc act, and it appearing to the commission that. Staples and office depot the transaction would lead to higher prices and reduced quality the commission has reason to believe that the proposed merger between staples and office depot is. The staples/office depot deal has been in jeopardy since december 2015, when the ftc filed a federal complaint to block the merger over antitrust concerns had judge sullivan determined that the.
Us antitrust officials challenged monday a proposed $63 billion merger between office-supply giants staples and office depot, arguing the combination would harm the business-to-business market. For this assignment, following apa style, answer as comprehensively as possible the questions after each case summary please refer to the file case study #1, proposed merger between staples and office depot leads to concerns of higher prices case study and answer the following questions. Investors in financial markets bet their dollars on whether amerger will raise or lower prices below, we apply an event-probability methodology to the proposed merger between staples and office.
Proposed merger between staples and office depot leads to concerns of higher prices michael baye and patrick scholten prepared this case to serve as the basis for classroom discussion rather than to represent economic or legal fact. Case study #1, proposed merger between staples and office depot leads to concerns of higher prices what arguments have staples and office depot made in defense of the proposed merger. The proposed combination of staples and office depot presents the federal trade commission (ftc) with a host of merger review challenges the transaction follows closely on the heels of the.
Today's setback for the proposed deal sent the shares of office depot tumbling $6 each, to $13, on the new york stock exchange, while shares of staples rose 625 cents, to $21875, in nasdaq trading. Staples also says it no longer will sell more than $550 million in its large corporate contract business to another office products company, essendant, as part of the office depot merger agreement.
The case is a condensed and slightly modified version of the public copy of the ftc's motion for a temporary restraining order and preliminary injunction against the proposed merger between staples and office depot dated april 10, 1997. Lead to higher prices in the market for the sale of consumable ofﬁce case 2: staples-ofﬁce depot (1997) proposed merger it argued that all of the. Baye m & scholten p proposed merger between staples and office depot leads to concerns of higher prices 2 michael r baye, managerial economics and business strategy, 7th ed, mcgraw hill irvin (2010), new york, ny 3.
Shares of both staples and office depot tumbled wednesday after the two office supply giants scuttled their proposed $63 billion merger because of antitrust concerns. This deal would eliminate head-to-head competition between staples and office depot and likely lead to higher prices and lower quality service for large businesses that buy office supplies. Investors in financial markets bet their dollars on whether a merger will raise or lower prices below, we apply an event-probability methodology to the proposed merger between staples and office.