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21 February 2013 | Adam Leach
The merger between Office Depot and OfficeMax, which will create a company with revenues of $18 billion (£11.77 billion), is forecast to create the opportunity for up to $600 million (£392 million) to be saved over the next three years.
Yesterday, the two companies announced their respective boards had given unanimous support to a complete merger of the office supply firms. A joint statement explained the deal would create significant savings opportunities for the new group through maximising spend on general and administration (G&A) goods and services.
The statement said: “The merger is expected to deliver $400-$600 million (£261-£392 million) in annual cost synergies by the third year following the transaction’s close by leveraging both operating and G&A efficiencies.” The statement also said the merger would enable the business to make further savings by combining best practice.
Neil Austrian, chairman and chief executive officer of Office Depot, said: “Combining our two companies will enhance our ability to serve customers around the world, offer new opportunities for our employees, make us a more attractive partner to our vendors, and increase stockholder value.
“Office Depot and OfficeMax share a similar vision and culture, and will greatly benefit from drawing on the industry’s most talented people, combining our best practices and realising significant savings.”
Under the terms of the merger, OfficeMax shareholders will be given 2.69 common shares in Office Depot for each share they currently own. The combined revenue of the two companies in 2012 was $18 billion. The merged business’ name, headquarters and brands will be decided once a CEO has been appointed.