The FTC’s challenge of the $6.3 billion dollar acquisition of Office Depot by Staples is a repeat of actions in 1997 and is based on the premise that the merger would significantly reduce competition nationwide.
In reading many of the comments, most consumers do not perceive harm in the merger because of the existence of on-line alternatives. For businesses, however, it is vastly different story: on-line alternatives are cumbersome for big buyers – imagine UPS delivering a pallet of paper. With only one national chain, a competitive situation will require a collection of regional players competing against a Staples behemoth. This is not exactly the most attractive situation. The FTC was correct in 1997 when there was even more competition and is even ‘more correct’ now.
Mattern was recently interviewed by the FTC about the proposed acquisition of Recall by Iron Mountain and questioned regarding the impact upon the competitive landscape. The FTC’s questions included: would the acquisition limit competition? Are there other national players? I imagine this is similar to the line of questioning surrounding the proposed Staples-Office Depot merger, bearing similar responses. It would be difficult to imagine that if the Iron Mountain-Recall acquisition didn’t go through that this one would.