Staples to Become an Office Supply Chain Monopoly
Staples CEO Ron Sargent just announced that his company will acquire Office Depot for the sum of $6.3 billion along with some company shares. He said, “This is a transformational acquisition which enables Staples to provide more value to customers, and more effectively compete in a rapidly evolving competitive environment.” Consumers are noticing that Staples is now the largest office supply chain store left on the market. In 2013, Office Max was acquired by Office Depot. So, that puts Staples in a position to become a monopoly.
Staples plans to take a close look at their supply chain to reduce global expenses and drive growth. Even though Staples already has a supply chain in place, they will look at the existing infrastructure of Office Depot to determine the most advantages suppliers and logistics for their company to stay profitable. They predict annual profits of $39 billion.
The acquisition is expected to be complete by the end of 2015. Thousands of Office Depot stores and Staples stores across the country will be closed. This is mainly because there are Staples locations near most of the Office Depot locations. Staples will determine which locations do the best and then close the stores accordingly.
Thousands of Office Depot and Staples employees are also facing termination, but that’s common whenever there is a merger or acquisition deal. Details about which stores are closing have not been made available to the public. This information will not become public until the acquisition deal gets approved by the Federal Trade Commission.
Staples plans to make the most strategic moves that will benefit their supply chain and keep their costs low. This is a plan to give customers the best value on products. This office store chain will have a monopoly, but they will still have to keep prices in check with stores such as Wal-Mart and distant competitors.
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