Office Depot Inc. and OfficeMax Inc. May Merge

In an interesting piece of news, Office Depot Inc. is in advanced talks to merge with OfficeMax Inc. Both of the companies are under a great deal of pressure from investors to boost their profitability and their shareholder value. A merger could help them to cut costs, close stores and boost their placement with suppliers.

Office Depot’s market capitalization is at $1.1 billion and Office Max has a market value of $932 million.
Benjamin Nahum, a portfolio manager at the investment firm Neuberger Berman LLC, said, “In our view this would facilitate a fair deal.”

According to Thomson Reuters data, Neuberger Berman owns 4.76% of OfficeMax, which makes it the third-largest shareholder of the company.

In 1997, The Federal Trade Commission rejected a $4 billion merger of Office Depot with Staples, arguing that it would lead to less competition and higher prices for customers. Analysts are now less concerned about those issues.