Future Merger Possible Between OfficeMax and Office Depot

Future Merger Possible Between OfficeMax and Office DepotThe Chicago Tribune has reported that a possible merger between U.S. office supply chains Office Depot Inc., which is based in Boca Raton, Florida and OfficeMax Inc., which is based in Naperville. While neither company has confirmed or denied the potential merger report, a top shareholder of OfficeMax, Neuberger Berman, indicated that it could support such a merger, depending on the terms of the proposed merger deal. Neuberger Berman is the third largest shareholder of OfficeMax.

Experts have speculated that any merger deal reached would be structured as a stock-for-stock transaction, although Neuberger Berman announced its preference for a special dividend to be declared prior to any merger, in order to compensate OfficeMax shareholders.

Chains like OfficeMax and Office Depot reportedly have struggled to remain competitive in recent years amidst competition from Staples Inc., which remains the largest office supply business worldwide, and websites such as Amazon.com. Both companies have consistently experienced declining revenues in their retail stores over the past few years.

By combining forces, analysts estimate that the companies could close several stores and streamline their operations substantially, which would allow the newly merged company to remain competitive in the market while still maintaining its existing customer base.

Mergers are a common transaction in the world of business, whether they involve large corporations or small businesses. Particularly in the increasingly competitive global marketplace, many businesses are finding that it makes sense to join with other like businesses in order to create a more profitable entity by reducing their overhead costs.

If your business is considering entering into any type of merger or consolidation agreement with another business entity, you will need the advice of a seasoned Naperville business attorney.  Contact our office today, and let us help you explore the options that may be available to your business.