Jam in Office Products Acquisition

The Commissioner of Competition is challenging a proposed merger that he claims would result in the consolidation of 80% of the Canadian office products market under a single banner.

In a $6.3 billion deal, Staples Inc. seeks to acquire the global business operations of its primary competitor, Office Depot Inc., including its Canadian subsidiary Grand & Toy Ltd. Both companies supply office products, including paper, ink and toner, office furniture, and breakroom and janitorial supplies across Canada.

Following a review of the notifiable transaction, the Competition Bureau concluded that the proposed merger would likely result in a substantial lessening of competition in the office products market, with particular impact on institutional and business-to-business purchasers. The Bureau fears that the remaining market participants, most of which are affiliated with the buying group Basics Office Products, will be unable to constrain the combined market power of Staples and Office Depot.

In filing an application with the Competition Tribunal, the Commissioner hopes to prevent all or part of the acquisition so as to maintain competition in the supply of office products in Canada.

Read the full press release from the Competition Bureau here.