US Office Supply Chains Staples, Office Depot In 'Advanced Talks' To Merge: Report

Staples Inc. and Office Depot, the two largest American office supply retailers, are in “advanced talks” to merge, The Wall Street Journal reported late Monday, citing sources familiar with the matter. The market value of the combined entity could reportedly be as much as $15 billion.

The news of the possible merger comes just days after activist investor Starboard Value LP, which owns 5.1 percent stake in Staples and a 10 percent stake in Office Depot, reportedly urged the two companies to merge as it would lead to greater savings.

The idea of a merger between the two companies has been floating around for quite sometime now. In September last year, analysts from Credit Suisse reportedly recommended that the two companies merge to compete against retail giants like Amazon and Walmart. A merger “makes significant financial and operational sense,” Gary Balter, a Credit Suisse analyst, reportedly wrote last year.

Together, the two companies have over 4,000 stores and annual sales of more than $35 billion, the Journal reported. Staples has a market value of about $11 billion, while Office Depot, which took over its rival OfficeMax in 2013 is valued at about $4 billion.

However, as of now, there is no guarantee that a deal would be reached.