US regulator doesn't allow Staples acquisition of Office Depot
The Federal Trade Commission is not budging from its move to block Staples from acquiring its rival Office Depot, according to New York Post.
Regulators have no interest in settling with Staples on the current terms, so Staples cannot complete its $6.3 billion merger, said three sources on different sides of the case being heard in US District Court in Washington, DC.
"Staples and the judge want a settlement. The government does not want one," a source said.
FTC lead attorney Tara Reinhart told US District Court Judge Emmet Sullivan last week that talks were continuing with Staples, sparking hope and causing Office Depot's shares to rise more than 5 percent on the day.
Still "the odds of a settlement are near zero," the source said.
On Dec. 7, by a 4-0 margin, the FTC Commissioners filed suit to block Staples from acquiring Office Depot. Judge Sullivan said he expects to decide by May whether to allow the FTC to stop the merger.
Staples told regulators it is willing to sell corporate contracts to national companies that total $1.25 billion.
"The judge says that makes sense," the source said.
Regulators believe that offer does not amount to much, since they are one-year contracts that Staples can win right back, the source said.
The FTC's main concern is national corporate customers only buy office supplies through Staples or Office Depot, and eliminating one could cause prices to rise.
Meanwhile, the FTC on Monday told the court it was adding its attorney Joseph Neely to its team handling the case.
The FTC declined comment.