EU sets terms for Staples takeover of rival Office Depot

The European Commission gave the go-ahead Wednesday for the US-based office supply company Staples to take over its domestic rival Office Depot, but said the merged company must sell off some of its European business to preserve competition.

Staples announced a year ago that it would purchase Office Depot for6.3 billion dollars, merging the two global office supply giants.

But in September, the commission - the European Union's competition watchdog - raised concerns that the deal could eliminate a key competitor in a market dominated by just three major players, including the European company Lyreco.

It expressed particular concern at the time about the impact on the Swedish market, where Staples and Office Depot appeared to have no significant competitors.

After investigating the matter, the EU's executive announced Wednesday that the deal could go ahead, as long as Office Depot sells of its entire business in Sweden and its contract distribution business across Europe.

This will "ensure that effective competition is maintained" and allow companies to reduce costs, said EU Competition Commissioner Margrethe Vestager.

The deal still requires the go-ahead from US competition authorities.

Staples is active in North and South America, Europe, Asia, Australiaand New Zealand, while Office Depot distributes office supplies in 57countries, according to the commission.

The EU watchdog can demand concessions from companies if it findsthat their merger actions hamper competition in the 28-member bloc.

Last update: Tue, 28/06/2016 - 17:25

More from Business

Tobacco giant BAT agrees to 49-billion-dollar takeover of US rival

British American Tobacco Plc on Tuesday said it has finalized a deal to acquire 57.8 per cent of shares of US rival...

IMF raises China growth forecast, but warns of sharper slowdown

China's economy will expand by 6.5 per cent this year, the International Monetary Fund said on Monday, as it warned...

Trump's warning to German carmakers hits shares

Shares in German carmakers tumbled on Monday after incoming US president Donald Trump threatened the industry with...

Report: Ex-Volkswagen head knew about scandal two months before

Former Volkswagen chief executive Martin Winterkorn knew about the company's emissions scandal two months earlier...

Takata to pay 1-billion-dollar criminal fine over defective airbags

Beleaguered Japanese car-parts supplier Takata has agreed to pay a criminal penalty of 1 billion dollars, and three...