Amazon is mulling an acquisition of Office Depot’s corporate business unit, according to a report in The New York Post.
The Post cited an anonymous source close to a “prominent activist investor,” who has acquired a stake in Office Depot. Of course, this all ties into a much larger game.
Staples is seeking approval from the Federal Trade Commission (FTC) to acquire rival Office Depot. The thinking is that the FTC will drop its opposition to the deal if Office Depot sells the company’s corporate-business unit, which caters to bulk buyers of office supplies, to a major competitor, such as Amazon.
Caution. This is the kind of report that often gets floated by one interested party or another to whip up investor interest. Some of the caveats include reports that the FTC has already largely concluded a combined Staples-Office Depot would have too much control over the corporate contract business. Even the Post concedes that other current rumors suggest Amazon is considering a bid for W.B. Mason, the third-largest office supplier.
What the report has going for it is that last week Staples met with the FTC. According to The Sun-Sentinel, the FTC indicated an approval would only come with Staples or Office Depot “divesting a going concern.” This means one of the companies must sell a standalone business unit. Another factor that makes the rumor sound legitimate is that Staples’ stock has declined 60 percent since 2008 and management appears to really, really want this merger to happen.
Something else, if Amazon acquires Office Depot’s corporate business unit, it would make the online company the No. 2 player in office supplies, according to some reports.
What’s also interesting is that while all the attention lately has been on Amazon’s build out of the retailer’s delivery network, or the Echo wireless speaker, or the growth of Amazon Web Services, the company has been over in the corner causing shockwaves in office supplies.
Amazon founded Amazon Business less than a year ago but according to US News and World Report, big numbers of consumers were already logging on there to order pens, paper, and Post-it notes, because of its convenience and low prices. How that affected competitors is unclear, but during the past three years, sales at Staples are down 12 percent.
