The deal is strongly opposed by members of the American Postal Workers Union, who say it would lead to higher prices for consumers and layoffs for employees. In premarket trading on Wednesday, Staples slipped about 2% while Office Depot climbed over 6%. Earlier in the week, investors cheered rumors that a deal was close. Staples said the talks that produced this deal began in September.Р вЂќР вЂћ deal was pushed by Starboard Value, an activist investor that owns a stake in both companies. The government scuttled a previous merger attempt between Staples and Office Depot in 1996, but approved the Office Depot and OfficeMax deal more recently.

The purchase announced Wednesday would unite the three brands, but it still must be approved by regulators. Р Р†Р вЂљРЎС™We have a well-developed copy and print operation Р Р†Р вЂљР’В¦ (and) we are now selling over a millionР Р†Р вЂљРЎСљ individual items online, he said, and Office Depot touted its furniture business. Р Р†Р вЂљРЎС™Next year, weР Р†Р вЂљРІвЂћСћll be pushing to 50% of our sales are not office supplies anymore,Р Р†Р вЂљРЎСљ said Sargent. It will also continue to offer more than the traditional paper and printer ink. Staples will Р Р†Р вЂљРЎС™better optimize our retail footprint (and) minimize redundancyР Р†Р вЂљРЎСљ - business language that usually means more store closings and layoffs, although management did not address the scope of potential cuts. The struggling office supply retailer said the merger will mean cost savings of about $1 billion per year. It currently has upwards of 1,300 locations in the United States, and securities filings show Office Depot has about 1,900. ThatР Р†Р вЂљРІвЂћСћs why Staples last year announced plans to close 12% of its stores. In this digital age, people just arenР Р†Р вЂљРІвЂћСћt buying pens and pencils like they used to, and Staples is feeling the pressure from all sides, including from giants WalMart (WMT) and Amazon (AMZN, Tech30). Over time, the multiple brands will be combined under Р Р†Р вЂљРЎС™one global name, Staples,Р Р†Р вЂљРЎСљ he said. Р Р†Р вЂљРЎС™Office Depot will make Staples bigger, and most importantly, we also believe Office Depot will make Staples better,Р Р†Р вЂљРЎСљ Staples CEO Ron Sargent said on a conference call with analysts. ThatР Р†Р вЂљРІвЂћСћs the same calculation Office Depot made not long ago, when it bought OfficeMax. But it left open the possibility of selling parts of its business if Staples wanted to combine their retail and e-commerce operation.Staples (SPLS) announced Wednesday it intends to buy rival Office Depot (ODP) in a $6.3 billion deal, betting that the key to higher profits is operating on an even larger scale. This time, however, Office Depot rejected the bid, saying it would invite antitrust scrutiny again.

Staples was eventually taken private by private equity firm Sycamore Partners, and this past January, the company - renamed as USR Parent - offered to buy Office Depot again for $2 billion. They attempted a merger again in 2015, this time for $6.3 billion, but that also was shot down by regulators over antitrust concerns. Staples' attempts to buy Office Depot extend back to 1997 when the Justice Department first rejected a $4 billion combination of their retail operations for fear it would limit competition.

Now USR Parent, which is Staples' retail office-supply business, says it is thinking about buying certain Office Depot assets, and Office Depot actually says it's not opposed to the idea. Time and time again, the office supplies giant has tried to buy its rival and failed, often because the government prevented it over antitrust concerns, but more recently because Office Depot itself said no. Staples just can't quit Office Depot (NASDAQ: ODP).

Staples to buy office depot