Accounting & Investing Info for San Antonio A & M
Thursday Feb 21 2013
Office Depot let their merger slip in an announcement. We simply have an over abundance of office supply stores with these two plus Staples. When I moved to San Marcos in 1999 all three were there in a town of
35,000 people.
In these deals you never want to be an employee of the acquired firm. The only way I can see that this will improve the fortunes of Office Depot is to close the office Max stores. I wonder if the employees of OM realize that.
I noticed that Staples’ stock jumped in price as news broke of the Office Depot/Office Max merger. However, I don’t understand why this occurrence happened. Do investors believe that Office Depot and Office Max’s market share will decrease after they merge, or that both companies’ business models are out of date compared to Staples and other similar companies such as Amazon?
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I do not remember exactly where I read it, but last year someone suggested ( or predicted) that Office Max would either close or merge so this does not really surprise me. Mainly also because in most towns where I have known managers from both Office Depot and Office Max, these companies have been friendly toward each other and understanding they are easy competitive targets, nothing new. Of course because these stores are in close proximity to each other many storefronts will close and job cuts will occur. If they stick to a program, grow with the times and concentrate of what the customer wants, they should be fine as a single entity. As for my personal taste, I seriously dislike Staples…so either Office Max or Office Depot will always have me as their customer. (Of course with recent major screw-ups Office Depot has had processing printable textbooks for us at Texas A&M-San Antonio, I am starting to dislike them as well….in fact because of that I have not shopped an Office Depot for two semesters and can care less about shopping them again.)
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Professor Elam 
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