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Could Office Deport and OfficeMax merger break antitrust laws?

Two hours before the announcement was even supposed to take place, the webcast provider for Office Depot accidently broadcasted a press release on the company's main page stating that final negotiations had been completed with OfficeMax for a merger of the two office-supply retailers. A $1.2 billion deal the company admits it hadn't even completed when the announcement was made.

Now as the two companies scramble to fill in the remainder of the details, some business law experts have raised an all important question: will this recent merger put both companies in danger of breaking antitrust laws?

Unlike the deal in the 1990s in which Office Depot tried to acquire Staples, financial experts believe that the two office-supply chains could see less government presence than before. Because of the change in the office supply market, very few people are expecting the government to accuse the companies of cornering the market anytime soon.

Some antitrust experts disagree however, pointing out that it's simply too soon to tell. And because the deal is not completely set in stone, some are suggesting that the companies take possible regulatory actions into consideration when hammering out the finer points of the deal.

Though Office Depot's CEO knows that this "merger of equals" could put them in a risky situation with regulators, he also points out that the merger is mutually beneficial to both companies who have been struggling in the recent years to keep up with online competition and warehouse club pricing. Also, both companies are expected to yield an average annual cost savings of up to $600 million within the first three years after the deal's completion at the end of 2013.

Source: Reuters News, "Office Depot in $1.2 billion deal to buy rival OfficeMax," Phil Wahba, Feb. 20, 2013

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