Staples's four-month campaign to acquire Corporate Express finally yielded an agreement Wednesday, a $2.7 billion deal that Staples hopes...
BOSTON — Staples’s four-month campaign to acquire Corporate Express finally yielded an agreement Wednesday, a $2.7 billion deal that Staples hopes will put further distance between itself and U.S. rivals Office Depot and OfficeMax.
Its two rivals combined would be smaller than Staples once the deal closes.
With U.S. retail sales of office supplies slumping, Staples also hopes to expand in the more profitable business of delivering office supplies to corporate customers — Corporate Express’ strength — and build off the Netherlands-based company’s clout in Europe.
“We’re going to go from a company where retail is about 60 percent of our sales to a company where delivery is about 60 percent of our sales,” said Ron Sargent, chairman and chief executive of Staples. “That is really transformational.”
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The agreement thwarts a competing deal Corporate Express had reached three weeks ago to acquire France’s Lyreco, which is now expected to receive a $46 million breakup fee from Corporate Express.
Staples wooed Corporate Express by raising its offer three times after its original Feb. 19 cash bid of 7.25 euros per share. The final price of 9.25 euros per share enticed Corporate Express’ management to re-enter talks. The Dutch firm had earlier resisted negotiations even as Staples brought its hostile offer directly to Corporate Express shareholders.
“I think the paper-clip wars are over, and it’s a win for both sides,” Sargent said.
One analyst said an Office Depot-OfficeMax tie-up could eventually be on the horizon as the rivals try to compete against a newly enlarged Staples, which would add Corporate Express’ 18,000 employees to its 76,000, and be less reliant on its core retail business.