Staples merger represents change for retail real estate market

Big news in the commercial real estate market: the office stationery retail business won’t be the same. In a deal announced on February 4, 2015, Staples will acquire Office Depot in a $6.3 billion deal. The businesses currently rank #1 and #2, respectively, in the office supplies market. The office supply retail market has undertaken several transformations over the years and this deal represents a greater chance for the merged company to be competitive in the commercial sector, ultimately providing greater consumer savings.

The merging of two retail giants

The deal between Staples and Office Depot has been a long time coming. A previous bid by Staples Inc. had been nixed by Office Depot Inc., however changes in the industry, and ultimately competition, influenced the decision and the two retail giants began talks in September 2014 and are currently in the advanced stages of talks to merge. The deal is expected to close at the end of 2015, pending FTC approval. The FTC is likely to approve the transaction, once it assesses the impact on prices from a previous deal between Office Depot and Office Max.

There are currently 315 Staples stores across Canada, although there are no longer any operational Office Depots, as the ceased operations in 2011.


Creating a more competitive market

The office supplies market has become a competitive market, with traditional office supply retailers, such as Staples and Office Depot, facing intense compeition. The merge will allow for greater consumer savings and would help the businesses compete against their largest competitors in the office supplies market- namely big-box stores such as Wal-Mart Stores Inc. and online competitors, such as Amazon Inc.

Find out more

To learn more about the merger and the implications on the retail real estate market, read the news article from The International Council of Shopping Centers (ICSC)- Staples to buy Office Depot in $6.3 billion deal.

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