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Deal still needs shareholder and regulatory approvals

Many retailers in the United States that sell technology products and other items for business users have been feeling significant pressure from online retailers like Amazon. Amazon has been steadily increasing pressure on traditional brick-and-mortar retailers as it reaches out with lower prices and even quicker shipping options. Amazon is even planning to offer a same-day shipping option in some areas that could put many brick-and-mortar retailers under incredible pressure.

One of the ways that some companies will look to survive the onslaught from online sellers is by mergers and acquisitions. This is exactly why Office Depot has done with the announcement of an agreement to buy o competitor OfficeMax. Office Depot and OfficeMax are the number two and number three office supply retailers respectively.
 
Office Depot will be purchasing OfficeMax in a stock deal worth approximately $1.2 billion reports The Washington Post. OfficeMax shareholders will receive 2.69 shares of Office Depot for every share of OfficeMax they own. That is a deal equal to $13.50 per share and OfficeMax reportedly has 86.7 million shares outstanding as of October 26, 2012.
 
Analysts believe that the deal reflects the changing retail landscape as more and more consumers begin to shop online.

The largest office-supply company in the industry is Staples, and even it is feeling pressure from Amazon.com. And it's not only online pressure that is challenging dedicated office supply retailers; big box discount stores such as Wal-Mart and Target are also entering the sector in a time when consumers are looking to save every penny they can. Target announced early in January that it would be price matching Amazon in an attempt to gain customers back that are shopping online.

Some cities with both Office Depot and OfficeMax stores will likely see some of the locations close down, but an official “store closing” list hasn’t been revealed yet. 

Sources: Washington Post, Time





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