The American Postal Workers Union (APW) is opposing the merger of Office Depot Inc (NASDAQ:ODP) with Staples, Inc. (NASDAQ:SPLS). The APW is protesting that the merger will create a monopoly in the office supplies and increases the prices. It has requested the involvement of Federal Antitrust Regulators to halt the deal.
The shareholders of Office Depot have given a nod for the merger with Staples on early Friday. A postal union worker, Richard Shelly, who is also the spokesperson for APW, said the proposed deal is detrimental to the interests of the consumers. The deal would adversely affect the consumers with skyrocketing prices as there are no other competitors in the office supplies segment.
The main aim of APW is to prevent monopoly in the office supplies and safeguard the interests of consumers. There were three major players like Staples, Office Depot and OfficeMax Inc (NYSE:OMX) in the office supplies. Office Depot has merged with Office Max in the year 2013 leaving with just two players in the field. Shelly said the merger of Office Depot with Staples leaves just one player in the office supplies segment.
The merger virtually eliminates office supply stores in the corners. Consumers will be left with no option to buy stationery as well. If I need to buy an ink cartridge for my printer urgently where should I go?
One could argue that the Internet offers the competition in the absence of office stores in the neighborhood. For instance, it takes few days to get the office supplies if I order through Internet. It will take another 10 years for the Amazon.com, Inc. (NASDAQ:AMZN)’s to deliver the office supplies instantly with the help of drones. Now, the question is how to manage the office supplies for the next 10 years.
A major chunk of the population has no Internet connection to order office supplies online. Therefore, the Internet is not a replacement for the local office supply store.
Office Depot and Staples requires the nod of Federal Trade Commission for the proposed deal.