Judge Blocks Staples-Office Depot Merger

WASHINGTON--A federal judge on Tuesday blocked the planned merger of office-supply rivals Staples Inc. and Office Depot Inc. because of antitrust concerns, a ruling that likely would sink the deal.

U.S. District Judge Emmet G. Sullivan, in a written order, sided with the Federal Trade Commission, which in a December lawsuit alleged the combination of the office superstores would lead to higher prices for large corporations that buy office supplies in bulk.

Judge Sullivan issued a preliminary injunction that bars the companies from completing the deal.

"The Court finds that Plaintiffs have met their burden of showing that there is a reasonable probability that the proposed merger will substantially impair competition in the sale and distribution of consumable office supplies to large business-to-business customers," the judge wrote.

The judge's full opinion wasn't immediately released to the public because it contains confidential business information.

Tuesday's loss is a blow for the companies, which hoped the deal would boost their fortunes after years of sinking revenues.

The ruling marks the second time the FTC has defeated a Staples-Office Depot merger effort, since it also won a decision in 1997 that prevented the companies from joining forces. In the current case, the office suppliers argued the market had changed dramatically in the nearly two decades since the earlier decision.

Write to Brent Kendall at [e-mail] and Drew FitzGerald at [e-mail]

(END) Dow Jones Newswires

May 10, 2016 19:25 ET (23:25 GMT)

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