European Commission says divestment of Office Depot's contract distribution business in Europe is necessary in order to maintain competition in EU's international office supplies market.
Following an in-depth reviewed launched in September 2015, the European Commission (EC) has approved the acquisition of US office supplies distributor Office Depot by its US rival Staples, subject to certain conditions.
According to the EC, the investigation showed that only Staples, Office Depot and Lyreco were able to offer international supply contracts to large business customers in Europe and that the planned merger would reduce competition in the market. In addition, the EC also found that the acquisition of Office Depot by Staples would have reduced competition in the markets for national contracts in Sweden and the Netherlands, as well as in the wholesale supply of office products in Sweden.
In order to address EC's concerns in international contract sales and national contract sales in Sweden and Netherlands, the companies offered to divest the whole of Office Depot's contract distribution business in the EEA and Switzerland, as well as Office Depot's entire business operations, the EC said in a press release on 10 February.
The EC concluded that "the commitments remove the entire overlap between the merging companies in all markets where concerns were raised, thus ensuring that an important alternative will remain available on these highly concentrated markets."
Staples announced that it would meet these requirements, and that the parties had also decided to divest Office Depot’s retail, online and catalog operations in Europe in connection with closing the transaction.
The merger is subject to ongoing litigation in the US and Canada.