Feb 19 - Jeffrey Goldfarb talks to Breakingviews columnists about why merging OfficeMax and Office Depot makes good sense in an era of ever-growing threats to specialized retailers.
There we couldn't be more excited about paper clips of depends it ink toner because office -- Office Depot are supposedly are going to be merging sooners are reports that that there is there and aux. Chris you've got to look at this -- little bit this morning. Seems like maybe the most obvious deal and Anthony were may have a better. This marriage made in heaven to the extent that -- that businesses that are really struggling to survive on that. Really hefty five from the Internet thanks to an astonishingly thin margins. And somewhere around rarely talking about 1% excellent statement to make a living. And that they have tremendous -- that they have lots of stools at the very place. And if you look at the potential synergy savings we could be talking up to three billion which is actually list mold and the combined value of the -- company. So it's a perfect deal and that -- -- as -- I mean you know these at this two -- three I guess staples still number one we've. Cut their paper there we're obviously keeping them number one but that's not what is there any kind of anti trust questions in this wild a couple of things that may be going. One is is the Obama antitrust. People are. Tend to be more aggressive -- they're always -- these -- much harder but you know number two or three. The public has to focus on the market players themselves the size of the market players in the market share. Justice in the FTC don't we focus they now focus more market dynamics is one of these players that ever does one of these players and keep prices that we saw -- Median that would delegate Mondello -- what most concerned justice which sued over that. Was that Mondello estate market map in the sense that it keeps prices that. Justice and this this industry I was there was a staples try to buy one of these to forget which one about fifteen years ago and I was before Amazon came along kind of -- -- they were three or today is Amazon one at staples account of these guys are relevant. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Of course you guidelines used to be you know looking at market you're looking at very sort of precise. Metrics now it's much more judgmental it's how they feel about this thing how are they how the different parties in the market pretty. Lot more flexible and then you know we get back to -- that the retail industry has been kind of but decimated. You know all quarters of a weak point to this one. As you know they're they're sort of look at how each other was of the points you've made here -- was as we put matters is the idea that. They actually can or -- there are all these -- It's four and I think -- well it would be about the chances that regulators to stand in the way it touchpad like you. Especially given that that means so much competition out there it's hard to see them getting together all of a sudden becoming accident that dominant monopoly -- fold since clearly from a market value perspective staples actually three times bigger than him combined use. It all happen massively today including statements which is that. That probably -- -- more value yet keep it again speculative buy out there but we will blow over but they'll keep an eye on this deal when it comes out. And we'll be back corporate and used.