Staples has announced it intends to buy competitor Office Depot in a $6.3 billion (£4.1 billion) cash and shares deal.
The acquisition will generate synergies of at least $1 billion (£657 million) through headcount reductions and efficiencies in areas including purchasing and supply chain, according to Staples.
Ron Sargent, chairman and CEO at Staples, said: “This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment.
“We expect to recognise at least $1 billion of synergies as we aggressively reduce global expenses and optimise our retail footprint. These savings will dramatically accelerate our strategic reinvention, which is focused on driving growth in our delivery businesses and in categories beyond office supplies.”
Roland Smith, chairman and CEO at Office Depot, said: "This transaction delivers great value for our shareholders and creates a company ideally positioned to serve our customers and grow over the long term.”
The deal, which will give Staples annual sales of around $39 billion (£25.6 billion), is subject to approval from shareholders and antitrust bodies.