Staples and Office Depot take another shot at FTC

The CEOs of Staples and Office Depot penned a letter to customers which reveals the extent of their deteriorated relations with the Federal Trade Commission ahead of a hearing that begins March 21 that will determine whether the retailers are allowed to merge.



In the letter, Staples chairman and CEO Ron Sargent and Office Depot chairman and CEO Roland Smith stop short of actually calling the FTC stupid, but that is the inference from more diplomatically worded prose.



“The FTC’s actions to stop this transaction are based on a flawed analysis of the marketplace and a deep misunderstanding of the competitive landscape,” Sargent and Smith state in the letter. “The FTC has cherry picked a few facts to fit its narrative and support its case. In making its case, the FTC refuses to even acknowledge the rise of new competitors, such as Amazon, and the disruptive effects of the digital economy.”



The pair contends, as they have since the deal was announced over a year ago, that the combination is good for customer of all sizes because the merged organization will be better able to compete more effectively against a large and diverse set of competitors. Instead, they suggest the FTC is concerned with protecting the 100 largest companies in the United States, arguing that the transaction would lead to the largest, most powerful companies in the world paying higher prices for pens, pencils, notepads, sticky notes, file folders, paperclips and copy paper.



“The FTC continues to act against the best interests of the hundreds of thousands of business customers, and millions of everyday consumers who will benefit from the acquisition,” according to the letter. “The FTC is simply wrong. The combination of Staples and Office Depot is good for customers.”



The acquisition has been approved in Australia, New Zealand, China and the European Union, subject to a divesture. To try to meet the FTC’s requirements, Staples recently entered into an agreement with Essendant to divest more than $550 million of wholesale business subject to the successful completion of the merger.



“This has been a long and frustrating road, but we look forward to a fair and impartial hearing,” Sargent and Smith wrote in their letter.