Federal regulators are preparing to block Staples’ anticipated $6.3 billion acquisition of rival Office Depot, according to sources of The New York Post. Staples officially agreed to buy Office Depot for $6.3 billion in February 2015, but the regulators are wary of the merger, which would combine the only two national office suppliers serving corporate clients.
The Federal Trade Commission (FTC) initially agreed to extend the transaction’s review period to Dec. 8, 2015, and has until then to decide whether to approve the transaction or sue to halt the deal. The FTC could potentially delay its decision again in an effort to get Staples to concede to more stringent terms.
The Post indicates that the four-member FTC panel in charge of reviewing the deal is split, with two members in favor of the deal and two opposed. The two panelists against the deal are said to be concerned over the fact that the combined company would handle all of the Fortune 1000’s office supply contracts.
In an attempt to satisfy the FTC’s antitrust concerns, Staples and Office Depot entered talks with wholesaler Essendant to transfer $600 million worth of corporate contracts to the company.
Representatives from Staples, Office Depot and the FTC have not commented on the matter.