The Federal Trade Commission (FTC)’s latest moves are “a signal” it might oppose the case in a lawsuit.
The Wall Street Journal reported on the latest developments in the merger, which was the subject of rumours confirmed in February and is worth $6.3 billion (€5.4 billion), with Australia recently clearing the deal. The FTC is said by the news outlet to be “stepping up its probe” of the takeover, seeking “sworn legal declarations” that “could be used if antitrust enforcers decide to challenge the deal”.
The newspaper noted that a decision on the merger “could come in October”, and added that the “requests for sworn statements” from other market “participants” are a “signal the FTC is gearing up for a possible lawsuit against the deal”. Questions about the validity of the merger concern “supplying corporate and government clients” in a procurement market “where there are few other major competitors”, with “probing questions” said to focus on this area.
The FTC’s antitrust review is currently in progress, with no decision “whether to approve or challenge the merger” according to sources, and the October deadline “could be extended” if both companies give the commission “more time”. Previous such investigations have seen such statements asked for, and “went ahead”, with the Wall Street Journal noting that the FTC “have placed a priority on being prepared to bring cases in the event that legal action is commenced”.
Previous evidence to suggest the merger may be opposed comes from a previous FTC decision in 1997 to “block a previous Staples-Office Depot merger”, but both companies insist “the landscape has since changed”, with Amazon and Wal-Mart just two companies putting them “under pressure in a highly competitive retail office-supply market”. With declining profits, both retail companies “have been relying on sales to large customers” to combat competition from online.