SOMERSET, NJ–The Office Depot on Easton Avenue in Rutgers Plaza will close forever on May 15, the day before the date Staples Inc. has to terminate its $6.3 billion-acquisition of the company.
Asked why the store was closing, one employee said the retailer was closing several stores worldwide, adding: “unfortunately we are one of the unlucky ones.”
The Somerset store is currently offering up to 30% off on a “bunch of things in the store,” said the worker. “It’s not everything.” For example, computer keyboards are being sold at 10% off.
The two companies said on February 2 that they had completed financing arrangements for their merger agreement, which began a year ago.
They extended the merger agreement to May 16, to “allow for the completion of ongoing litigation with the Federal Trade Commission (FTC),” according to a joint news release.
In December, the FTC filed a complaint to stop Staples, the nation’s largest office supply store, from buying its top competitor, Office Depot Inc., saying the acquisition would violate antitrust laws.
“The commission has reason to believe that the proposed merger … is likely to eliminate beneficial competition that large companies rely on to reduce the costs of office supplies,” said FTC Chairwoman Edith Ramirez.
“The FTC’s complaint alleges that Staples and Office Depot are often the top two bidders for large business customer.”
The FTC said that in competing for contracts, both companies now provide prices and services required by large business customers nationwide, but that the “purported efficiencies” of the merger would not “offset the likely competitive harm.”
Staples and Office Depot say they will begin a hearing in U.S District Court on March 21, to “fight to merge the two companies,” according to a March 18 letter to customers.
The companies say that combining forces is good for all sized customers and will allow it to compete better against new and diverse customers such as Amazon.com.
They accuse the FTC of conducting a “flawed analysis of the marketplace,” and say the agency simply doesn’t understand the competitive landscape.
“The FTC has cherry picked a few facts to fit its narrative … [to prevent the merger],” reads the letter to customers.
“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 companies explain in the letter that the government wants to protect the “100 largest companies in the United States,” and the feds say the merger would lead to those companies paying higher prices for office supplies.
But the companies say they have invested in “merger synergies” that will lower prices for all customers.
“Still, 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,” reads the letter.
“The FTC also ignores the millions of products beyond office supplies that customers purchase … from cleaning supplies to breakroom snacks to furniture and technology.”
The companies cite four countries that have approved the deal, subject to a divesture: Australia, New Zealand, China, and the European Union.
“This has been a long and frustrating road, but we look forward to a fair and impartial hearing,” the companies said in the letter.
It’s the second merger to affect Office Depot in recent years. In November 2013, Office Depot purchased Office Max, the third largest office supply chain.