Boca Raton, Fla., and Naperville, Ill. — Office Depot and OfficeMax have announced the signing of a definitive agreement between the two retailers that will combine them in an all-stock merger of equals.
Boca Raton, Fla., and Naperville, Ill. — Office Depot and OfficeMax have announced the signing of a definitive merger agreement between the two retailers. The companies will combine in an all-stock merger of equals. Under the terms of the agreement, OfficeMax stockholders will receive 2.69 common shares of Office Depot stock for each share of OfficeMax common stock they possess.
Office Depot and OfficeMax will have equal representation and governance rights on the combined company’s board of directors. Both parties have agreed to form a selection committee made up of equal representatives from each company to oversee the search process for a new CEO for the combined company. Office Depot CEO Neil Austrian and OfficeMax CEO Ravi Saligram will be considered for the position along with external candidates. The combined company’s name, marketing brands and corporate headquarters location will be decided following the appointment of the CEO. The transaction is expected to close by the end of the year.
In a joint statement, the two companies expect to see 400-$600 million in annual cost synergies within three years of the merger’s completion. Office Depot currently operates 1,629 stores, and OfficeMax operates approximately 900 stores. No details have been released as to how the combined company will deal with competing stores located in the same market.
Both companies saw falling sales in 2012. Office Depot reported 2012 sales of $10.7 billion, which is a 7 percent decrease from 2011. OfficeMax reported $6.92 billion in sales for 2012 — a 2.8 percent decrease from 2011.
SOURCES: Office Depot, OfficeMax