Boston, MA 11/11/2013 (wallstreetpr) – Office Depot Inc (NYSE:ODP) has announced on Tuesday that it has completed the agreement to buy out its smaller competitor OfficeMax Inc. In their financial results for the third quarter both the companies have missed the profit targets set by Wall Street.
The two companies have named their present CEO’s as the co-CEOs of the new company as the search for a new CEO is going on. The companies received the go ahead from the regulators for the $976 million deal. The new deal aims to cuts costs, strengthen their retail business, improve their power of negotiations with retailers and improve their chances of competing with the leader in the market Staples Inc (SPLS.O), and as well as compete with online and discount competitors.
The committee that is tasked with the job of finding a new CEO has said that the date when the Federal Trade Commission would approve the deal was not certain so their job of finding a new person was made difficult, but it expected to complete the process soon.
The new company will be called “Office Depot, Inc” and will use the symbol ODP while being traded on the New York Stock Exchange. It will continue to manage its operations from Boca Raton, Florida, and Naperville, Illinois, until a new CEO joins it and they decide on the location of the headquarters.
Office supply retailers are fighting to stay afloat in the market as more and more clients are buying their needs online from Amazon.com Inc (AMZN.O), chemists or other retailers.
The new company revenue would have been $17 billion in the 12 month ending September 28. The new company expects that its one-time operating costs this year will be around $200 million. After the third year of the completion of the deal the company expects that it will make a cost saving in the range of $400 million to $600 million.