Proposed Merger Between Staples And Office Depot - 972 Words

Anticompetitive Effects and Price Effects: Proposed Merger between Staples and Office Depot (1997) Xueqi Ji 6252074952 Abstract FTC employed structural, documentary, statistical, econometrics and financial evidence to verify that the proposed merger of Staples and Office Depot will lead to increase in market concentration, market prices and stock prices, and thus support FTC’s contention that this merger will cause an anticompetitive effect on Office Superstore market. Staples and Office Depot made a plain and useless contradiction. Finally, the Court announced to agree with FTC, and granted a preliminary injunction on this merger. This paper mainly focuses on FTC’s evidence and analysis. Keywords: antitrust, horizontal merger,†¦show more content†¦Staples (2006), Orley Ashenfelter, David Ashmore, Johnathon B. Baker, Suzanne Gleason and Daniel S. Hosken leveraged extensive public record to provide a detailed discussion of the econometric models used in this merging case and to show how differences between the models led to the discrepancy between these estimates. FTC claimed that based on various analysis and evidence, proposed merger between Staples and Office Depot will harm competition in office superstore chain market and raise market price which will lessen customers’ welfare. Nevertheless, two parties of merger casted doubt on every detailed statement, and interpreted that this merger will reduce costs, broaden scale of economies, improve economic efficiency, and optimize resource allocation, and then lower market price efficiently. Finally, the Court chose to agree with FTC’s contention. II.Background In 1996, there were three largest and absolutely dominant office superstores (OSS) chains in United States office supply market, Staples, Office Depot and OfficeMax. Office superstores can get access to much more convenient and cheaper supply of goods than small retailers through signing a mass of contracts with suppliers. They are mostly located in downtown business districts, and own considerable floor areas, a wide variety of product types and sizable supply size. Therefore, they can provide consumers with great user experience and convenience byShow MoreRelatedEssay on The Ofiice Superstore Case Study1655 Words   |  7 PagesHow would you classify the office superstore industry? Who are the competitors? What are the characteristics of this industry that lead to this conclusion? Today’s office superstore industry in the United States provides a convenient one-stop shopping experience for small businesses and individuals with home offices. The main competitors in the industry are Office Depot, Staples, and Office Max. All of them offer a variety of office supplies, as well as computers, office furniture and other businessRead MoreMerger Between Staples And Office Depot2589 Words   |  11 PagesProposed Merger between Staples and Office Depot Leads to Concerns of Higher Prices The effect and impact of corporate mergers of companies can be a significant change for the company’s prosperity and growth as well as the consumer’s point of view also. Though few of the mergers and acquisitions might be helpful for the company and be profitable as well there are always few risks and failures that come with the process. According to a study the company has only 50% chance of success when it comesRead MoreStaples And Office Depot Inc.2289 Words   |  10 PagesStaples and Office Depot Inc. are both office supply chains. Today both companies are doing great considering where they came from and their competitive market. 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As per ASC 820-10-20 it is, â€Å"The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.† The codification does allow other methods of valuation when there is not information available to assist in setting a market value. The initial measurement seems clear; however, there are often issuesRead MoreCase5831 Words   |  24 Pages* Camila Andrea Pinzà ³n Gà ³mez 201213506 WHAT IS ALL THIS CASE ABOUT? The principal idea of the case is examine Target, a discount retailer who was always known for their ‘cheap chic’, â€Å"Expect More, Pay Less† value proposition. 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