Staples agrees to buy Office Depot in $6.3 billion deal

FORT LAUDERDALE, Fla. – Staples announced Wednesday morning it has agreed to acquire Office Depot in a stock transaction for $6.3 billion.

The deal would combine the nation’s top two office-supply retailers. Office Depot, based in Boca Raton, bought the No. 3 company, OfficeMax, in a $1.2 billion transaction in 2013.

Under the terms of the agreement, Office Depot shareholders would receive, for each Office Depot share, $7.25 in cash and 0.2188 of a share in Staples stock at closing. The price was based on Staples’ closing share price on Monday. The deal values Office Depot at $11 a share.

Staples said it would retain its headquarters in Framingham, Massachusetts, and “evaluate maintaining a presence in Boca Raton.”

Staples began discussions to acquire Office Depot in September. The agreement has been unanimously approved by each company’s board of directors. With the acquisition of Office Depot, Staples said it would have annual sales of about $39 billion.

“This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment,” said Ron Sargent, Staples’ chairman and CEO. The combined companies should have cost savings of at least $1 billion, as it reduces global expenses.

He said the savings will “accelerate our strategic reinvention, which is focused on driving growth in our delivery businesses and in categories beyond office supplies.”

Office Depot Chairman and CEO Roland Smith said the transaction “delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term.”

The deal needs antitrust regulatory approval and Office Depot shareholder approval.