Staples Inc.’s proposed $4.4 billion purchase of Office Depot Inc. should be rejected because it will reduce competition and raise prices to consumers, said Ralph Nader’s Public Citizen group.
The group said its study found that a box of store-brand thermal fax paper cost at least $7 less where the retailers competed with each other or OfficeMax Inc., than at stores that had no competition from another office-supply superstore chain.
Staples and Office Depot last week agreed to a request by the FTC to extend its antitrust review, allowing the retailers to gather more information requested by the agency. FTC lawyers fear that prices will rise if one of the two chains disappears, while the companies say their combination will result in lower prices.
Nader’s group will meet with the Federal Trade Commission later this week to discuss the results, said James Love, an economist who worked on the study.
Office Depot’s shares fell in heavy trading Monday in part because the study throws further doubt on the sale going through, said Eric Longmire, director of research at Wyser-Pratte & Co., a New York- based firm specializing in arbitrage.
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