Following widespread speculation of an impending merger, Office Depot Inc. announced today that it would acquire OfficeMax Inc. for $1.17 billion in stock as the two retailers seek to gain ground on Staples Inc., the nation’s largest office supplies chain.
Stocks of Office Depot and OfficeMax surged 9.4 percent and 21 percent, respectively, on Tuesday after reports of a merger became more widespread.
In what both companies described as a “merger of equals,” Office Depot said it would issue 2.69 new shares for each outstanding OfficeMax common share, which equates to $13.50 per share and a 26 percent premium based on the Feb. 19 closing price of OfficeMax.
The two companies last year combined for about $18 billion in sales to more than $24 billion in sales for rival Staples.
As part of the merger agreement, the companies said a new board of directors would be formed and that it would include an equal number of directors selected by Office Depot and OfficeMax. The deal is pending regulatory approvals.