Big changes at Staples, FedEx shake up office sector

RT NATIONWIDE REPORT—A series of major developments shook the market for office products and services in recent weeks, the ripple effects of which will be felt for years to come.

Staples prevailed in its effort to acquire Corporate Express after raising its initial offer three times. Shareholders of Amsterdam-based Corporate Express found Staples’ offer of €9.25 per share too rich to pass up, especially since the amount represented a roughly 100% premium from Corporate Express’ closing share price of €4.32 the day before rumors of Staples’ interest caused the share price to increase.

The combination of the two creates a global office products and services powerhouse with combined annual sales of approximately $27 billion. Corporate Express diversifies Staples’ business by greatly increasing the scope of its international presence and building on the success of its highly profitable North American Delivery division.

Staples’ unsolicited, all-cash buyout of Corporate Express overshadowed another significant industry development. FedEx Kinko’s announced it will rebrand itself as FedEx Office. The change will impact 1,900 worldwide locations over the next several years, resulting in the company taking an $891 million, largely non-cash, charge against fourth-quarter earnings. The move comes just four years after FedEx Corp. acquired Kinko’s, changed the name of stores to FedEx Kinko’s and embarked on an aggressive expansion program to open hundreds of satellite stores connected to larger production hubs. However, disappointing results caused growth plans to be scaled back dramatically earlier this year and a new management team was installed.

“The name FedEx Office more accurately represents our broader role of providing superior information and services through our company-owned, digitally-connected locations around the world,” said Brian D. Philips, president and ceo of FedEx Office.